frontier and emerging markets facing the spectre
Post on 02-Jan-2022
6 Views
Preview:
TRANSCRIPT
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 CRobertson@rencap.com Daniel Salter +44 (203) 379-7824 DSalter@rencap.com Vikram Lopez +44 (203) 379-7974 VLopez@rencap.com Yvonne Mhango +27 (11) 750-1488 YMhango@rencap.com Oleg Kouzmin +7 (495) 258-7770 x4506 OKouzmin@rencap.com 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.
Renaissance Capital 11 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
3
Key economic indicators 173
Disclosures appendix 175
Renaissance Capital 11 November 2015
Facing the spectre
4
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
Renaissance Capital 11 November 2015
Facing the spectre
5
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
Renaissance Capital 11 November 2015
Facing the spectre
6
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
Renaissance Capital 11 November 2015
Facing the spectre
7
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
Renaissance Capital 11 November 2015
Facing the spectre
8
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.
-6
-4
-2
0
2
4
6
8
10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
F
2016
F
2017
F
2018
F
2019
F
2020
F
EM DM EM growth premium World
0
50
100
150
200
250
300
350
400
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
MSCI Emerging Markets rel. MSCI World
Strategy overview
Renaissance Capital 11 November 2015
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)
Source: Bloomberg, Renaissance Capital
Figure 9: MSCI EM and DM, 12-month forward P/E, x
Source: Bloomberg, Renaissance Capital
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.
80
85
90
95
100
105
110
115
120
Jan-
95
Oct
-95
Jul-9
6
Apr
-97
Jan-
98
Oct
-98
Jul-9
9
Apr
-00
Jan-
01
Oct
-01
Jul-0
2
Apr
-03
Jan-
04
Oct
-04
Jul-0
5
Apr
-06
Jan-
07
Oct
-07
Jul-0
8
Apr
-09
Jan-
10
Oct
-10
Jul-1
1
Apr
-12
Jan-
13
Oct
-13
Jul-1
4
Apr
-15
EM ex-China aggregate REER EM aggregate REER FM Aggregate REER
50
60
70
80
90
100
110
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
EM Trailing 12M EPS, $ DM Trailing 12M EPS, $
8
10
12
14
16
18
2010 2011 2012 2013 2014 2015
EM DM
Renaissance Capital 11 November 2015
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
Source: EPFR, Renaissance Capital
Figure 12: Cumulative inflows to FM, $mn
Source: EPFR, Renaissance Capital
Figure 13: Cumulative inflows to FM, % of AuM
Source: EPFR, Renaissance Capital
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.
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012 2013 2014 2015
-10
-8
-6
-4
-2
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012 2013 2014 2015
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012 2013 2014 2015
-10
-5
0
5
10
15
20
25
30
35
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012 2013 2014 2015
Renaissance Capital 11 November 2015
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
Source: Bloomberg, Renaissance Capital
Figure 15: Valuations vs five-year average, FM
Source: Bloomberg, Renaissance Capital
0
2
4
6
8
10
12
14
16
18
20
Mex
ico
Phi
lippi
nes
Indi
a
Sou
th A
fric
a
Mal
aysi
a
Chi
le
Indo
nesi
a
Tha
iland
Per
u
Col
ombi
a
Qat
ar
Cze
ch
Tai
wan
Pol
and
EM
Inde
x
Gre
ece
UA
E
Hun
gary
Bra
zil
Kor
ea
Egy
pt
Chi
na
Tur
key
Rus
sia
12 month Fwd P/E (x) 12 month Fwd P/E (x) Long-term average (5yr)
0
2
4
6
8
10
12
14
16
18
20
Ban
glad
esh
Vie
tnam
Mor
occo
Lith
uani
a
Sri
Lank
a
Sau
di A
rabi
a
Kuw
ait
Slo
veni
a
Rom
ania
Ken
ya
Cro
atia
FM
Om
an
Est
onia
Jord
an
Pak
ista
n
Nig
eria
Mau
ritiu
s
Leba
non
Bah
rain
Arg
entin
a
Kaz
akhs
tan
Current 12 month Fwd P/E (x) 12 month Fwd P/E (x) Long-term average (5yr)
Renaissance Capital 11 November 2015
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.
Source: Bloomberg, Renaissance Capital
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
-20%
-10%
0%
10%
20%
30%
40%
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
Feb
-16
May
-16
Aug
-16
EM EPS growth expectation Actual EPS growth ($) Actual EPS growth (lcl)
Renaissance Capital 11 November 2015
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
Renaissance Capital 11 November 2015
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 $
Commodities (ex. oil)
Brent crude, $
EMBI spread (inverted)
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%
Source: Bloomberg, MSCI, Renaissance Capital
Renaissance Capital 11 November 2015
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 $
Commodities (ex. oil)
Brent crude, $
EMBI spread (inverted)
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%
Source: Bloomberg, MSCI, Renaissance Capital
16
Renaissance Capital 11 November 2015
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
Renaissance Capital 11 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
110
115
120
Jan-
95
Oct
-95
Jul-9
6
Apr
-97
Jan-
98
Oct
-98
Jul-9
9
Apr
-00
Jan-
01
Oct
-01
Jul-0
2
Apr
-03
Jan-
04
Oct
-04
Jul-0
5
Apr
-06
Jan-
07
Oct
-07
Jul-0
8
Apr
-09
Jan-
10
Oct
-10
Jul-1
1
Apr
-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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Jan-
82
Jan-
83
Jan-
84
Jan-
85
Jan-
86
Jan-
87
Jan-
88
Jan-
89
Jan-
90
Jan-
91
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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.
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
rate vs $ FX rate implied by
long-term average REER FX rate if REER
falls to lows Long-term average
divided by current rate 2015 C/A
(% 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/$, and the weakest point (in 1992) was ZMW17.6/$.
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
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)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
Jan-
75
Jan-
76
Jan-
77
Jan-
78
Jan-
79
Jan-
80
Jan-
81
Jan-
82
Jan-
83
Jan-
84
Jan-
85
Jan-
86
Jan-
87
Jan-
88
Jan-
89
Jan-
90
Jan-
91
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0
20
40
60
80
100
120
140
160
Chi
na
Rus
sia
Kor
ea
Bra
zil
Indi
a
Tur
key
UA
E
Kaz
akhs
tan
Qat
ar
Mal
aysi
a
Sau
diA
rabi
a
Tha
iland
Stock of outstanding eurobonds issued by banks, in $bn
Mar-05 Mar-15
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
27
Figure 33: Stock of outstanding international debt securities issued by EM "other financial institutions", 2005 vs 2015 – classified by nationality (note with June 2015 data not listed here, the BIS has reclassified debt. “Other financial institutions” here is now often classified as “corporate” via an SPV in more recent data)
Source: BIS
The main positive we can take from the past year is that Russia has been a test case for
what happens when a currency halves in value, when commodities halve in value and
when external markets cut off roll-overs (in Russia’s case due to sanctions). Thanks to
wise hoarding of FX reserves and the decisions to maintain a C/A surplus by allowing
rouble depreciation and to offer FX support to local banks and corporates, Russia has
successful weathered these challenges. We think we may see more problems in
commodity exporters that have not built up hefty FX reserves, which may be one reason
why the rand has been so weak and why FM FX looks vulnerable.
Below we list MSCI EM and later MSCI FM countries by gross external debt as a
percentage of GDP in 2014-2015, using IMF data. Where available, we show the figure
once we strip out inter-company loans – in Hungary’s case, gross external debt of 148%
of GDP (2Q15 debt figures divided by IMF-assumed 2015 GDP) becomes 84% of GDP
once we exclude loans from foreign parent companies (such as Volkswagen) to
Hungarian subsidiaries. Brazil looks better than Colombia (or indeed Mexico) on this
measure. There are problems with the data – our Russia economist Oleg Kouzmin points
out that Russia’s external debt burden will be 40% of GDP this year, not 45% as implied
by these figures.
Figure 34: Gross external debt (% of GDP, capped at 100%, LHS) vs 2Q15 international debt securities ($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
100
150
200
250
300
Chi
na
Bra
zil
Rus
sia
UA
E
Mal
aysi
a
Sou
thA
fric
a
Kor
ea
Indo
nesi
a
Mex
ico
Qat
ar
Indi
a
Kaz
akhs
tan
Stock of outstsanding Eurobonds issued by "other financial institutions" in $bn
Mar-05 Mar-15
134
35
6344
28
93
60
113 110
33 30
153
46
10
210
72
4215
180
4731
5
79
0255075100125150175200225
0102030405060708090
100
Gre
ece
Hun
gary
Pol
and
Mal
aysi
a
Cze
ch R
epub
lic
UA
E**
Chi
le*
Tur
key
Rus
sia*
Sou
th A
fric
a
Qat
ar*
Bra
zil
Col
ombi
a
Tha
iland
Mex
ico
Indo
nesi
a
Per
u
Tai
wan
*
Kor
ea
Phi
lippi
nes
Indi
a*
Egy
pt
Chi
na**
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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 $11bn SWF (2014
data), equivalent to 31% of GDP. Its ratios look worse than those of Oman, with external
debt of 26% of GDP and a SWF that was 30% of GDP in 2014. Investors do not ask
about Bahrain but both Bahrain and Oman look problematic to us.
6 See Figure 14 from Frontier and emerging markets: Reform awakens, 14 May 2015.
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
29
Figure 35: Gross external debt (% of GDP, capped at 100%, LHS) vs 2Q15 outstanding international debt securities ($bn, RHS)
Note: *** means 2014 data, * means 1Q15 data and no star means 2Q15 data.
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)
Note: *** means 2014 data, * means 1Q15 data and no star means 2Q15 data.
Source: IMF, BIS
2
12
25
16
17
25
1116
5 5
18
84
36
6 84
51
4 50 3
8
0
10
20
30
40
50
60
0102030405060708090
100
Mau
ritiu
s
Bah
rain
**
Ukr
aine
Slo
veni
a
Est
onia
Bul
garia
Kaz
akhs
tan
Lith
uani
a
Cro
atia
Jord
an*
Tun
isia
Rom
ania
Sri
Lank
a
Ken
ya
Leba
non
Ser
bia*
Mor
occo
Vie
tnam
*
Arg
entin
a
Om
an*
Pak
ista
n*
Ban
glad
esh*
Kuw
ait*
*
Nig
eria
*
External debt to GDP (%) Ext. Debt ex IC Lending Outstanding debt sec by residence (BIS June 2015)
2 4
53
0 03 1 0
93
00
10
20
30
40
50
60
0
20
40
60
80
100
120
Geo
rgia
Gha
na*
Ven
ezue
la *
*
Uga
nda
Zim
babw
e*
Zam
bia*
Tan
zani
a*
Rw
anda
**
Sau
diA
rabi
a*
Iraq
*
Iran
*
External debt to GDP (%) Ext. Debt ex IC Lending Outstanding debt sec by residence (BIS June 2015)
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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.
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
411
1825
31 36 38 4248 49 50 51 54 55 60
68 7384
103109
116130 131
-12
-10
-8
-6
-4
-2
0
2
4
6
8
0
20
40
60
80
100
120
140
160
Kor
ea
Tai
wan
Mal
aysi
a
Pol
and
UA
E
Cze
ch R
ep
Mex
ico
Hun
gary
Chi
le
Tha
iland
Per
u
Rus
sia
Col
ombi
a
Tur
key
Gre
ece
Qat
ar
Sou
th A
fric
a
Chi
na
Phi
lippi
nes
Indo
nesi
a
Bra
zil
Indi
a
Egy
pt
2015 rank 2016 rank Change
Below the red line shows an improvement in rank
Above the red line showsa worsening in rank
-14-11
-9 -8 -8 -8 -7-4 -4 -3
-1 -12 3
6 710 10
14 1518
20
26
-20
-15
-10
-5
0
5
10
15
20
25
30
0
20
40
60
80
100
120
140
160
Hun
gary
Cze
ch R
ep
Bra
zil
Indi
a
Rus
sia
Tai
wan
Chi
na
Pol
and
Tur
key
Gre
ece
Kor
ea
Mal
aysi
a
Phi
lippi
nes
Mex
ico
Indo
nesi
a
Chi
le
Per
u
UA
E
Egy
pt
Qat
ar
Col
ombi
a
Tha
iland
Sou
th A
fric
a
Old method 2015 New method 2015 Change in rank
Above the red line is worse ranking
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
59 65 70 74 7590
101 107 108 113 121 123138
169 174
24
6282 83
97114 118 122
139155 161
-25
-20
-15
-10
-5
0
5
10
020406080
100120140160180200
Est
onia
Lith
uani
a
Slo
veni
a
Mau
ritiu
s
Rom
ania
Bul
garia
Cro
atia
Kaz
akhs
tan
Ser
bia
Bah
rain
Om
an
Tun
isia
Mor
occo
Vie
tnam
Kuw
ait
Sri
Lank
a
Ken
ya
Jord
an
Arg
entin
a
Leba
non
Pak
ista
n
Nig
eria
Ban
glad
esh
Geo
rgia
Rw
anda
Sau
di A
rabi
a
Ukr
aine
Zam
bia
Gha
na
Iran
Uga
nda
Tan
zani
a
Zim
babw
e
Iraq
2015 rank 2016 rank Change
Below the red line shows an improvement
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
-11-10 -7 -7
-3-2 -1 -1 0 3
8 8 9 11 14 14 15 15 17
-20-18 -15
-11 -9
49 9 9
3542
-30
-20
-10
0
10
20
30
40
50
020406080
100120140160180200
Cro
atia
Kaz
akhs
tan
Ser
bia
Slo
veni
a
Rom
ania
Jord
an
Arg
entin
a
Ken
ya
Lith
uani
a
Bul
garia
Ban
glad
esh
Est
onia
Nig
eria
Mau
ritiu
s
Bah
rain
Pak
ista
n
Mor
occo
Om
an
Kuw
ait
Sri
Lank
a
Tun
isia
Vie
tnam
Leba
non
Zam
bia
Zim
babw
e
Uga
nda
Iran
Ukr
aine
Iraq
Geo
rgia
Rw
anda
Tan
zani
a
Sau
di A
rabi
a
Gha
na
Old method 2015 New method 2015 Change in rank
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0.0 0.0 0.0
-0.8 -1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
50
55
60
65
70
75
80
85
90
Indi
a
Rus
sia
Mex
ico
Indo
nesi
a
Pol
and
UA
E
Chi
le
Col
ombi
a
Egy
pt
Qat
ar
Phi
lippi
nes
Chi
na
Hun
gary
Cze
ch R
ep
Tha
iland
Gre
ece
Mal
aysi
a
Tai
wan
Bra
zil
Kor
ea
Per
u
Sou
th A
fric
a
Tur
key
2015 Score 2016 Score change
5
3 3
2 2 2 11 1 1 1 1 0 0 0 0 0 0 0 0 0
0 0
5
1 1 1 1 1 00
0 0-1
-2
-1
0
1
2
3
4
5
6
40
45
50
55
60
65
70
75
80
85
Ken
ya
Kaz
akhs
tan
Ser
bia
Slo
veni
a
Vie
tnam
Om
an
Sri
Lank
a
Nig
eria
Mor
occo
Tun
isia
Lith
uani
a
Mau
ritiu
s
Kuw
ait
Ban
glad
esh
Est
onia
Cro
atia
Rom
ania
Bul
garia
Pak
ista
n
Jord
an
Bah
rain
Arg
entin
a
Leba
non
Uga
nda
Zim
babw
e
Tan
zani
a
Ukr
aine
Iran
Geo
rgia
Sau
di A
rabi
a
Gha
na
Iraq
Zam
bia
Rw
anda
2015 Score 2016 Score Change
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0
20
40
60
80
100
120
140
160
180
200
0 20 40 60 80 100 120 140 160 180 200
Eas
e O
f D
oin
g B
usi
nes
s R
ank
(201
4-2
015)
Corruption Rank (2014)
High corruption& good business environment
Low corruption& poor business environment
High corruption& poor business environment
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0
20
40
60
80
100
Kor
eaE
ston
iaC
zech
Rep
Pol
and
Slo
veni
aC
hile
UA
ER
oman
iaG
eorg
iaC
roat
iaM
alay
sia
Hun
gary
Bot
swan
aS
outh
Afr
ica
Bul
garia
Kaz
akhs
tan
Gre
ece
Mex
ico
Rus
sia
Bra
zil
Tun
isia
Chi
naT
haila
ndS
erbi
aA
rgen
tina
Phi
lippi
nes
Mon
golia
Per
uC
olom
bia
Mor
occo
Gha
naT
anza
nia
Tur
key
Jord
anV
ietn
amC
ote
d'Iv
oire
Sri
Lank
aIn
done
sia
Uga
nda
Eth
iopi
aU
krai
neZ
ambi
aIr
anLe
bano
nK
enya
Pak
ista
nE
gypt
Indi
aN
iger
iaC
ambo
dia
Zim
babw
eV
enez
uela
Ban
glad
esh
Mya
nmar
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
0.3
0.4
0.5
0.6
0.7
0.8
0.9
20 30 40 50 60 70 80 90 100
WJP
sco
re
Average score in two chapters of WB EODB 2015 report
Businessfriendly
Unfriendly to business
Strong legal system
Weak legal system
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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)
Source: Bloomberg, Renaissance Capital
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 ($; last 12M)
Source: Bloomberg
Oil exporters fared poorly, as the performance of the Gulf countries, Kazakhstan and
Nigeria shows; however, their underperformance could also be attributed to their defence
of their exchange rates: unpegged Russia performed strongly in local currency terms to a
large degree because the rouble has already adjusted significantly to a lower oil price
environment, as we highlighted in our recent note Russian equities: Take a look inside,
published 24 September 2015.
60
70
80
90
100
110
120
130
Jan-
14
Feb
-14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep
-14
Oct
-14
Nov
-14
Dec
-14
Jan-
15
Feb
-15
Mar
-15
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Frontier Emerging World
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Hun
gary
Rom
ania
Est
onia
Arg
entin
a
Chi
na
Phi
lippi
nes
Kor
ea
Jord
an
Pak
ista
n
Leba
non
Indi
a
Vie
tnam
Tai
wan
Lith
uani
a
Cro
atia
Slo
veni
a
Tun
isia
S A
fric
a
Om
an EM
Tur
key
Chi
le
Ban
glad
esh
Cze
ch
Tha
iland
Mex
ico
Ken
ya
Mau
ritiu
s
Rus
sia
Fro
ntie
r
Sri
Lank
a
Qat
ar
Mor
occo
Per
u
Indo
nesi
a
Egy
pt
Pol
and
Kuw
ait
UA
E
Sau
di A
rabi
a
Bah
rain
Mal
aysi
a
Nig
eria
Ser
bia
Bul
garia
Bra
zil
Col
ombi
a
Kaz
akhs
tan
Gre
ece
Frontier performance, 12M ($) EM performance, 12M ($) Local currency performance
Where are we now in Frontier
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: Bloomberg, Renaissance Capital
Figure 50: 12-month forward P/E premium (discount) for MSCI FM vs EM
Source: Bloomberg, Renaissance Capital
Figure 51: 12-month forward P/E premium (discount) for MSCI EM vs DM
Source: Bloomberg, Renaissance Capital
0
2
4
6
8
10
12
14
16
18
2009 2010 2011 2012 2013 2014 2015
FM EM DM
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
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
MSCI FM vs EM Average
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
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
MSCI EM vs DM Average
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: Bloomberg, Renaissance Capital
Figure 53: MSCI EM indices, 12-month forward P/E, x
Source: Bloomberg, Renaissance Capital
0
2
4
6
8
10
12
14
16
18
20
Ban
glad
esh
Vie
tnam
Mor
occo
Lith
uani
a
Sri
Lank
a
Sau
di A
rabi
a
Kuw
ait
Slo
veni
a
Rom
ania
Cro
atia
Ken
ya FM
Arg
entin
a
Om
an
Est
onia
Pak
ista
n
Jord
an
Nig
eria
Leba
non
Mau
ritiu
s
Bah
rain
Kaz
akhs
tan
Current 12 month Fwd P/E (x) 12 month Fwd P/E (x) Long-term average (5yr)
0
5
10
15
20
25
Mex
ico
Phi
lippi
nes
Indi
a
Sou
th A
fric
a
Mal
aysi
a
Chi
le
Indo
nesi
a
Tha
iland
Cze
ch
Per
u
Qat
ar
Tai
wan
Col
ombi
a
Pol
and
EM
Inde
x
UA
E
Gre
ece
Kor
ea
Bra
zil
Hun
gary
Egy
pt
Tur
key
Chi
na
Rus
sia
12 month Fwd P/E (x) 12 month Fwd P/E (x) Long-term average (5yr)
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: Bloomberg, Renaissance Capital
Figure 55: MSCI EM, FM and DM indices – trailing RoE, %
Source: Bloomberg, Renaissance Capital
Figure 56: MSCI indices – trailing RoE, %
Note: MSCI Kazakhstan saw negative RoE in November 2014.
Source: Bloomberg, Renaissance Capital
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2009 2010 2011 2012 2013 2014 2015
FM EM DM
0
2
4
6
8
10
12
14
16
18
2009 2010 2011 2012 2013 2014 2015
FM EM DM
0
5
10
15
20
25
30
35
Ken
ya
Ban
glad
esh
Pak
ista
n
Nig
eria
Arg
entin
a
Lith
uani
a
Tun
isia
Mor
occo
Om
an
Mau
ritiu
s
Vie
tnam
Sri
Lank
a
Fro
ntie
r
Slo
veni
a
Sau
di A
rabi
a
DM
EM
Ser
bia
Leba
non
Kuw
ait
Est
onia
Cro
atia
Bah
rain
Rom
ania
Bul
garia
Jord
an
RoE (%) 12 months prior
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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, %
Source: Bloomberg, Renaissance Capital
Figure 58: MSCI indices, trailing dividend yield, %
Source: Bloomberg, Renaissance Capital
0
1
2
3
4
5
6
7
8
2009 2010 2011 2012 2013 2014 2015
FM EM DM
0
2
4
6
8
10
12
Kaz
akhs
tan
Cro
atia
Ser
bia
Pak
ista
n
Lith
uani
a
Bah
rain
Om
an
Slo
veni
a
Mor
occo
Leba
non
Kuw
ait
Mau
ritiu
s
Ken
ya
Sau
di A
rabi
a
Fro
ntie
r
Nig
eria
Tun
isia
Est
onia
Rom
ania
EM
Ban
glad
esh
DM
Sri
Lank
a
Jord
an
Vie
tnam
Arg
entin
a
Bul
garia
Dividend Yield (%) 12 months prior
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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.
Source: Bloomberg, Renaissance Capital
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
Source: Bloomberg, Renaissance Capital
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%
2%
4%
6%
8%
10%
12%
2015E 2016E
Frontier EM
-40%
-20%
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
FM to EM FM to DM EM to DM
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
45
Figure 61: MSCI FM, EM and DM – annual returns
Source: Bloomberg, Renaissance Capital
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
Source: Bloomberg, Renaissance Capital
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
FM EM DM
0
5
10
15
20
25
30
35
40
45
Indi
a
Tur
key
Indo
nesi
a
Sou
th K
orea
Tha
iland
Chi
na
Mal
aysi
a
EM
Cze
ch
Per
u
Pol
and
Tai
wan
Mex
ico
Egy
pt
Hun
gary
Rus
sia
Bra
zil
Nig
eria
Phi
lippi
nes
Pak
ista
n
Ken
ya
Chi
le
UA
E
Gre
ece
Col
ombi
a
Sou
th A
fric
a
Rom
ania
Kaz
akhs
tan
Sau
di A
rabi
a
Qat
ar
Vie
tnam
Sri
Lank
a
Om
an
Arg
entin
a
Kuw
ait
FM
Mor
occo
Slo
veni
a
Mau
ritiu
s
Cro
atia
Est
onia
Leba
non
Jord
an
Ser
bia
Ukr
aine
Tun
isia
Lith
uani
a
Bah
rain
Bul
garia
EM FM EM average 18 FM average 6
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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.
Source: IMF October 2014 WEO
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
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
2017
E
2018
E
2019
E
2020
E
DM EM DM - EM differential
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
F
2016
F
2017
F
2018
F
2019
F
DM EM DM - EM differential
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
47
Figure 65: IMF forecast GDP growth, %
Source: IMF October 2015 WEO
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
Source: IMF October 2015 WEO
-10
-8
-6
-4
-2
0
2
4
6
8
10
Indi
aIr
aqT
anza
nia
Rw
anda
Ken
yaB
angl
ades
hS
ri La
nka
Vie
tnam
Chi
naP
hilip
pine
sG
hana
Uga
nda
Indo
nesi
aQ
atar
Pak
ista
nM
alay
sia
Iran
Nig
eria
Egy
ptZ
ambi
aR
oman
iaM
aurit
ius
Jord
anM
oroc
coP
olan
dP
eru
Bah
rain
Tha
iland
Kor
eaU
AE
Tun
isia
Geo
rgia
Tur
key
Est
onia
Om
an US
Mex
ico
Col
ombi
aLi
thua
nia
Tai
wan
Cze
chK
uwai
tC
hile
Leba
non
Hun
gary
Zim
babw
eK
azak
hsta
nU
KS
Ara
bia
Ukr
aine
Bul
garia
Slo
veni
aC
anad
aG
erm
any
Ser
bia
Fra
nce
S A
fric
aIta
lyJa
pan
Cro
atia
Rus
sia
Arg
entin
aB
razi
lG
reec
e
Em
Asi
aE
MS
ub S
ahar
aM
EN
AW
orld
Em
Eur
ope
DM
Eur
ozon
eLa
tam
CIS
2016 2015
-4
-2
0
2
4
6
8
10
12
Ukr
aine
Iraq
Iran
Rus
sia
Gha
naT
unis
iaB
razi
lK
uwai
tS
erbi
aG
eorg
iaG
reec
eZ
imba
bwe
Jord
anP
eru
Est
onia
Lith
uani
aK
azak
hsta
nT
haila
ndC
anad
aM
aurit
ius
Rw
anda
Leba
non
Kor
eaR
oman
iaM
exic
oIta
lyIn
done
sia
Japa
nT
aiw
anN
iger
iaF
ranc
eK
enya
Phi
lippi
nes
Col
ombi
aU
SU
gand
aP
akis
tan
Ban
glad
esh
Qat
arC
hile
Bul
garia
Indi
aC
roat
iaT
anza
nia
UA
EE
gypt
Ger
man
yS
ri La
nka
Pol
and
S A
fric
aV
ietn
amB
ahra
inT
urke
yM
alay
sia
UK
Zam
bia
Hun
gary
Slo
veni
aC
hina
Arg
entin
aM
oroc
coS
Ara
bia
Cze
chO
man CIS
ME
NA
Lata
mE
MS
ub S
ahar
aW
orld
DM
Eur
ozon
eE
M E
urop
eE
M A
sia
2016 vs 2015 GDP growth
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: IMF October 2015 WEO
-6
-5
-4
-3
-2
-1
0
1
2
3
4
Iran
Rom
ania
Bah
rain
Kuw
ait
Vie
tnam
Rus
sia
Bul
garia
Mau
ritiu
sH
unga
ryIta
lyP
olan
dP
hilip
pine
sB
angl
ades
hLe
bano
nR
wan
daS
erbi
aS
ri La
nka
Chi
naE
gypt
Cro
atia
Indi
aU
krai
neF
ranc
eU
AE
Geo
rgia
Slo
veni
aG
erm
any
UK
Tan
zani
aU
gand
aJa
pan
Cze
chP
akis
tan
US
Om
anK
orea
Zim
babw
eK
enya
Can
ada
Indo
nesi
aM
alay
sia
Mex
ico
Est
onia
S A
rabi
aIr
aqLi
thua
nia
Gha
naN
iger
iaT
urke
yJo
rdan
S A
fric
aT
haila
ndK
azak
hsta
nT
unis
iaC
hile
Arg
entin
aC
olom
bia
Mor
occo
Tai
wan
Qat
arP
eru
Bra
zil
Zam
bia
Gre
ece
CIS
ME
NA
Eur
ozon
eE
M A
sia
EM
Eur
ope
DM
Wor
ldE
MS
ub S
ahar
aLa
tam
Change in 2016 GDP growth forecast October vs April WEO
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
Ban
glad
esh
Chi
naP
akis
tan
Leba
non
Rw
anda
Vie
tnam
Arg
entin
aJo
rdan
Indi
aS
ri La
nka
Phi
lippi
nes
Ken
ya US
Zim
babw
eK
orea
Indo
nesi
aT
aiw
anG
hana UK
Tan
zani
aIr
anM
oroc
coC
hile
Mal
aysi
aT
haila
ndZ
ambi
aM
aurit
ius
Qat
arB
ahra
inT
unis
iaS
Afr
ica
Tur
key
Uga
nda
Kaz
akhs
tan
Mex
ico
Japa
nC
zech
Per
uC
anad
aR
oman
iaP
olan
dG
erm
any
Est
onia
Lith
uani
aH
unga
ryS
love
nia
Nig
eria
Cro
atia
Fra
nce
UA
ES
Ara
bia
Italy
Bul
garia
Ser
bia
Geo
rgia
Gre
ece
Om
anB
razi
lIr
aqC
olom
bia
Kuw
ait
Ukr
aine
Rus
sia
2015 vs 2014 $ GDP (%ch)
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: EPFR, Renaissance Capital
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)
Source: EPFR, Renaissance Capital
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
5,000
10,000
15,000
20,000
25,000
30,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Global Frontier Regional Frontier in mainstream GEM funds
Global Frontier46%
EMEA27%
Asia18%
Frontier in mainstream GEM
funds8%
LatAm1%
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
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
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
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
0
20
40
60
80
100
120
140
160
180
Vie
tnam
Pak
ista
n
Ban
glad
esh
Kuw
ait
Arg
entin
a
Nig
eria
Jord
an
Om
an
Rom
ania
Ken
ya
Sri
Lank
a
Mor
occo
Bah
rain
Tun
isia
Mau
ritiu
s
Cro
atia
Slo
veni
a
Leba
non
Est
onia
Kaz
akhs
tan
Lith
uani
a
Bul
garia
Ser
bia
Sau
di A
rabi
a
Iran
Tan
zani
a
Iraq
Rw
anda
Gha
na
Uga
nda
Zam
bia
3MADTV, $mn, current 3MADTV, $mn, 18 May 15 3MADTV, $mn, 28 April 14
1,302
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Source: Bloomberg, Renaissance Capital
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
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Arg
entin
a
Kaz
akhs
tan
Est
onia
S A
rabi
a
Slo
veni
a
Ken
ya
Pak
ista
n
Om
an
Cro
atia
Rom
ania
Bul
garia
Mor
occo
Kuw
ait
Nig
eria
Bah
rain
Leba
non
Sri
Lank
a
Vie
tnam
Lith
uani
a
Ban
glad
esh
Mau
ritiu
s
Jord
an
Ukr
aine
Tun
isia
Ser
bia
Egy
pt
Per
u
UA
E
Sou
th K
orea
Bra
zil
Col
ombi
a
Chi
na
Chi
le
Indo
nesi
a
Gre
ece
Phi
lippi
nes
Indi
a
Cze
ch
Tur
key
Tha
iland
Hun
gary
Qat
ar
S A
fric
a
Mex
ico
Rus
sia
Pol
and
Tai
wan
Mal
aysi
a
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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, %
Source: Bloomberg, Renaissance Capital
Figure 77: MSCI FM country weights, %
Source: Bloomberg, Renaissance Capital
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%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EM
(83
4)C
hina
(14
3)S
outh
Kor
ea (
107)
Tai
wan
(96
)In
dia
(71)
Sou
th A
fric
a (5
4)B
razi
l (66
)M
exic
o (2
8)R
ussi
a (2
0)M
alay
sia
(42)
Indo
nesi
a (3
0)T
haila
nd (
32)
Tur
key
(25)
Pol
and
(23)
Phi
lippi
nes
(21)
Chi
le (
20)
Qat
ar (
13)
UA
E (
10)
Col
ombi
a (1
2)P
eru
(3)
Gre
ece
(9)
Hun
gary
(3)
Egy
pt (
3)C
zech
(3)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
53
Country profiles
Co
un
try p
rofi
les
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
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
Argentina MSCI Argentina
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
May
-15
Sep
-15
MSCI Argentina, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)
Argentina
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
55
Figure 86: Population, ’000
Source: UN
Figure 87: Export destinations, total $69bn
Source: IMF
Figure 88: CPI avg %, C/A % of GDP
Source: IMF
Figure 89: Argentina – peso
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 90: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 91: Real GDP % change, YoY
Source: IMF
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
0%
5%
10%
15%
20%
25%
Bra
zil
EU
Eur
o A
rea
Chi
na
US
A
Chi
le
Ven
ezue
la
Uru
guay
Indi
a
Net
herla
nds
% of total exports Value ($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
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
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 20 No. of companies 41 3M ADTV, $mn 1.6
Figure 93: Index performance
Figure 94: MSCI sector weights
Figure 95: Index and stock data
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 96: 3M ADTV, $mn
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
Feb
-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
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
Bahrain MSCI Bahrain
5
6
7
8
9
10
11
12
13
14
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 Bahrain, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)
Bahrain
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
57
Figure 98: Population, ’000
Source: UN
Figure 99: Export destinations, total $37bn
Source: IMF
Figure 100: CPI avg %, C/A % of GDP
Source: IMF
Figure 101: Bahrain – dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 102: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 103: Real GDP % change, YoY
Source: IMF
0
200
400
600
800
1,000
1,200
1,400
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0%
1%
2%
3%
4%
Sau
di A
rabi
a
EU
US
A
UA
E
Eur
o A
rea
Kor
ea
Japa
n
Indi
a
Ken
ya
Tan
zani
a
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
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
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
2014
2015
E
2016
E
2017
E
2018
E
Bahrain
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 18.2 2015 FY EPS growth 25.8% Trailing P/B, x 4.4 Beta to FM 0.3 MSCI full MktCap, $bn 8.4 MSCI free float MktCap, $bn 2.1 No. of companies 4 3M ADTV, $mn, MSCI cos 6.3
Local index DSEX
MktCap, $bn 41.4 No. of companies 242 3M ADTV, $mn 59.0
Figure 105: Index performance
Figure 106: MSCI sector weights
Figure 107: 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 (%)
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 -
Figure 108: 3M ADTV, $mn
Figure 109: 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
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 Bangladesh, $
46%
22%
21%
11%
Healthcare Materials Telecoms Energy
0
50
100
150
200
250
300
350
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
Bangladesh MSCI Bangladesh
5
7
9
11
13
15
17
19
21
23
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
DSEX Index 12M Fwd PE (x) Frontier
Bangladesh
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
59
Figure 110: Population, ’000
Source: UN
Figure 111: Export destinations, total $30bn
Source: IMF
Figure 112: CPI avg %, C/A % of GDP
Source: IMF
Figure 113: Bangladesh – taka
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 114: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 115: Real GDP % change, YoY
Source: IMF
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
EU
Eur
o A
rea
US
A
Ger
man
y
UK
Net
herla
nds
Fra
nce
Spa
in
Italy
Can
ada
% of total exports Value ($bn), 2014, RHS
-2
-1
0
1
2
30
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
Current account balance (% of GDP) RHS CPI (average % YoY)90
100
110
120
130
140
15040
50
60
70
80
90
100
110
120
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
BDT vs $ BDT vs EUR Bangladesh 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
Change in lending as % of GDP Real GDP (% YoY)
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
E
2017
E
2018
E
Bangladesh
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 1 No. of companies 15 3M ADTV, $mn 0.1
Figure 117: Index performance
Figure 118: MSCI sector weights
Figure 119: 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 (%)
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 -
Figure 120: 3M ADTV, $mn
Figure 121: Valuations vs FM*
*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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
61
Figure 122: Population, ’000
Source: UN
Figure 123: Export destinations, total $29bn
Source: IMF
Figure 124: CPI avg %, C/A % of GDP
Source: World Bank, Bloomberg:
Figure 125: Bulgaria – lev
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 126: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 127: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
20
0%
10%
20%
30%
40%
50%
60%
70%
EU
Eur
o A
rea
Ger
man
y
Italy
Tur
key
Rom
ania
Gre
ece
Fra
nce
Bel
gium
Sin
gapo
re
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 11 No. of companies 25 3M ADTV, $mn 1.2
Figure 129: Index performance
Figure 130: MSCI sector weights
*reflects sale of Adris Grupa’s Tobacco unit to BAT in September 2015
Figure 131: 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 (%)
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 -
Figure 132: 3M ADTV, $mn
Figure 133: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
63
Figure 134: Population, ’000
Source: UN
Figure 135: Export destinations, total $14bn
Source: IMF
Figure 136: CPI avg %, C/A % of GDP
Source: IMF
Figure 137: Croatia – kuna
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 138: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 139: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
EU
Eur
o A
rea
Italy
Bos
nia
and
Her
z.
Slo
veni
a
Ger
man
y
Aus
tria
Ser
bia
Hun
gary
Rus
sia
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 41.3 No. of companies 13 3M ADTV, $mn 25.9
Figure 141: Index performance
Figure 142: MSCI sector weights
Figure 143: 3M ADTV, $mn
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
65
Figure 147: Index and stock data
Ticker Name Sector MktCap FF MktCap 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) (%) ($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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
66
Figure 148: Population, ’000
Source: UN
Figure 149: Export destinations, total $171.8bn
Source: IMF
Figure 150: CPI avg %, C/A % of GDP
Source: IMF
Figure 151: Czech Republic – koruna
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 152: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 153: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
20
40
60
80
100
120
140
160
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
EU
Eur
o A
rea
Ger
man
y
Slo
vaki
a
Pol
and
UK
Fra
nce
Aus
tria
Italy
Hun
gary
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
67
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 29.8 No. of companies 100 3M ADTV, $mn 49.8
Figure 155: Index performance
Figure 156: MSCI sector weights
*Excludes negative to positive EPS changes
Figure 157: 3M ADTV, $mn
Figure 158: Valuations vs EM
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)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Egypt
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
69
Figure 161: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
70
Figure 162: Population, ’000
Source: UN
Figure 163: Export destinations, total $26.7bn
Source: IMF
Figure 164: CPI avg %, C/A % of GDP
Source: IMF
Figure 165: Egypt – pound
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 166: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 167: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
1
2
3
4
5
6
7
8
9
0%
5%
10%
15%
20%
25%
30%
35%
EU
Eur
o A
rea
Italy
Sau
di A
rabi
a
Indi
a
Tur
key
US
A
UK
Liby
a
UA
E
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
71
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 8.9 2015 FY EPS growth 33.1% Trailing P/B, x 0.9 Beta to FM 0.6 MSCI full MktCap, $bn 0.9 MSCI free float MktCap, $bn 0.4 No. of companies 2 3M ADTV, $mn, MSCI cos 0.3
Local index TALSE
MktCap, $bn 2.0 No. of companies 15 3M ADTV, $mn 0.5
Figure 169: Index performance
Figure 170: MSCI sector weights
Figure 171: 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 (%)
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 -
Figure 172: 3M ADTV, $mn
Figure 173: 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
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
73
Figure 174: Population, ’000
Source: UN
Figure 175: Export destinations, total $16bn
Source: IMF
Figure 176: CPI avg %, C/A % of GDP
Source: IMF
Figure 177: Estonia – kroon/euro
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 178: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 179: Real GDP % change, YoY
Source: IMF
0
100
200
300
400
500
600
700
800
900
1,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
0%
10%
20%
30%
40%
50%
60%
70%
80%
EU
Eur
o A
rea
Sw
eden
Fin
land
Latv
ia
Rus
sia
Lith
uani
a
Ger
man
y
Nor
way
Net
herla
nds
% of total exports Value ($bn), 2014, RHS
-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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
75
Figure 182: Population, ’000
Source: UN
Figure 183: Export destinations, total $2.9bn
Source: IMF
Figure 184: CPI avg %, C/A % of GDP
Source: IMF
Figure 185: Georgia – lari
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 186: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 187: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0%
5%
10%
15%
20%
25%
EU
Aze
rbai
jan
Eur
o A
rea
Arm
enia
Rus
sia
Tur
key
US
A
Bul
garia
Ukr
aine
Chi
na
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 16.3 No. of companies 35 3M ADTV, $mn 0.2
Figure 189: Index performance
Figure 190: MSCI sector weights
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.
Figure 191: 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 (%)
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 -
Figure 192: 3M ADTV, $mn
Figure 193: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
77
Figure 194: Population, ’000
Source: UN
Figure 195: Export destinations, total $10bn
Source: IMF
Figure 196: CPI avg %, C/A % of GDP
Source: IMF
Figure 197: Ghana – cedi
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 198: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 199: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0%
5%
10%
15%
20%
25%
30%
35%
40%
EU
Eur
o A
rea
Chi
na
Fra
nce
Tai
wan
Indi
a
Net
herla
nds
Italy
Sou
th A
fric
a
UK
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)40
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
78
Figure 200: Key data Local currency EUR
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
MktCap, $bn 41.9 No. of companies 60 3M ADTV, $mn 39.7
Figure 201: Index performance
Figure 202: MSCI sector weights
*Excludes stocks with forecast negative earnings **Excludes negative-to-positve EPS changes
Figure 203: 3M ADTV, $mn
Figure 204: Valuations vs EM
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)
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 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
Expected 2015 earnings Expected 2016 earnings
Greece
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
79
Figure 207: Index and stock data
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
80
Figure 208: Population, ’000
Source: UN
Figure 209: Export destinations, total $35.2bn
Source: IMF
Figure 210: CPI avg %, C/A % of GDP
Source: IMF
Figure 211: Greece – euro
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 212: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 213: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
EU
Eur
o A
rea
Tur
key
Italy
Ger
man
y
Bul
garia
Cyp
rus
UK
Sau
di A
rabi
a
Egy
pt
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)40
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
81
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 15.8 No. of companies 14 3M ADTV, $mn 25.3
Figure 215: Index performance
Figure 216: MSCI sector weights
*Excludes negative-to-positive EPS changes
Figure 217: 3M ADTV, $mn
Figure 218: Valuations vs EM
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)
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
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
Expected 2015 earnings Expected 2016 earnings
Hungary
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
83
Figure 221: Index and stock data
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
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
84
Figure 222: Population, ’000
Source: UN
Figure 223: Export destinations, total $107.9bn
Source: IMF
Figure 224: CPI avg %, C/A % of GDP
Source: IMF
Figure 225: Hungary – forint
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 226: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 227: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
10
20
30
40
50
60
70
80
90
100
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
EU
Eur
o A
rea
Ger
man
y
Aus
tria
Rom
ania
Slo
vaki
a
Italy
Fra
nce
Pol
and
Cze
ch R
epub
lic
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)4.8
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
85
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 350.1 No. of companies 521 3M ADTV, $mn 280.3
Figure 229: Index performance
Figure 230: MSCI sector weights
Figure 231: 3M ADTV, $mn
Figure 232: Valuations vs EM
Figure 233: Non-ETF allocations to Indonesia in GEM funds relative to MSCI weight, %
Figure 234: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Indonesia
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
87
Figure 235: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
88
Figure 236: Population, ’000
Source: UN
Figure 237: Export destinations, total $177.1bn
Source: IMF
Figure 238: CPI avg %, C/A % of GDP
Source: IMF
Figure 239: Indonesia - rupiah
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 240: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 241: Real GDP % change, YoY
Source: IMF
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
0%
2%
4%
6%
8%
10%
12%
14%
Japa
n
Chi
na EU
Sin
gapo
re
US
A
Eur
o A
rea
Indi
a
Kor
ea
Mal
aysi
a
Tai
wan
% of total exports Value ($bn), 2014, RHS
-4
-3
-2
-1
0
1
2
30
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
Current account balance (% of GDP) RHS CPI (average % YoY)60
70
80
90
100
110
120
130
1406,000
8,000
10,000
12,000
14,000
16,000
18,000
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
IDR vs $ IDR vs EUR Indonesia REER (Dec 07=100)
Weaker
Stronger
-1
0
1
2
3
4
5
6
7
8
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
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
5.0
4.7
5.1
5.5
5.8
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
2017
E
2018
E
Indonesia
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
89
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
90
Figure 242: Key data
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, $mn 12M Fwd P/E
Persian Gulf PetChem. Co. Chemicals 8,953 358 3.0 5.7 TCI Telecoms 3,421 171 1.0 4.4 TAPPICO Chemicals 3,153 189 2.9 4.1 Mobarakeh Steel Base metals 2,909 640 1.5 3.7 MCI Telecoms 3,945 355 0.7 4.8 Mellat Bank Banking 2,660 585 0.8 4.9 Parsian O&G Dev. Co. Chemicals 3,581 645 2.0 4.8 Ghadir Investment Co. Ind. Holding 2,786 446 0.7 3.6 NICIC Base Metals 1,963 452 1.4 4.6 Pasargad Bank Banking 2,174 1,130 1.3 5.2 MAPNA Group Engineering 2,435 268 0.9 15.7 IRI Marine Co. Logistics 3,055 153 0.2 42.9 Omid Investment Management Ind. Holding 1,768 106 0.4 2.2 Gol e Gohar Mining Metallic Ore 1,567 266 0.4 5.0 Chadormalu Mining Metallic Ore 1,445 159 0.4 2.1 Pardis PetChem Co. Chemicals 1,982 277 0.9 5.3 Saderat Bank Banking 1,769 389 0.8 7.2 Tejarat Bank Banking 1,429 329 0.5 9.2 Melli Dev. Invest. Co. Ind. Holding 803 129 0.2 2.8 Civil Pension Fund Invest. Co. Ind. Holding 1,363 164 0.3 4.6 Informatics Services Co. IT 1,336 67 0.1 9.8 M&M Dev. Co. Metallic Ore 798 183 0.4 3.5 Iran Khodro Auto 773 178 0.6 5.5 Kharg PetChem. Co. Chemicals 855 94 0.3 4.4 Parsian Bank Banking 966 193 0.5 10.0 Behran Oil Co. Oil Products 596 191 0.1 4.3 Eghtesad Novin Bank Banking 689 90 0.1 5.3 Saipa Auto 617 148 0.5 133.4 Ansar Bank Banking 645 168 0.5 6.6 Fanavaran PetChem Co. Chemicals 536 64 0.3 4.0 Average
2032 286 3.0 5.7
Source: Tehran Stock Exchange, local estimates
Figure 244: Iran market performance (lcl) (31/12/2009=100)
Source: Tehran Stock Exchange
Figure 245: Iran TEPIX Index sector weights
Source: Tehran Stock Exchange
80
130
180
230
280
330
380
430
Jan-
10
May
-10
Sep
-10
Jan-
11
May
-11
Sep
-11
Jan-
12
May
-12
Sep
-12
Jan-
13
May
-13
Sep
-13
Jan-
14
May
-14
Sep
-14
Jan-
15
May
-15
Sep
-15
TEPIX Index ($)
Materials40.7%
Financials14.8%
Industrials14.8%
Energy12.4%
Telecoms8.2%
Cons. Disc.3.5%
Healthcare2.8%
IT1.4%
Cons. Staples1.3%
Iran
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
91
Figure 246: Population, ’000
Source: UN
Figure 247: Export destinations, total $86bn
Source: IMF
Figure 248: CPI avg %, C/A % of GDP
Source: IMF
Figure 249: Iran – rial
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 250: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 251: Real GDP % change, YoY
Source: World Bank:
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
0%
5%
10%
15%
20%
25%
30%
35%
Chi
na
Indi
a
Tur
key
Japa
n
Kor
ea
Pak
ista
n
Syr
ia
EU
Eur
o A
rea
UA
E
% of total exports Value ($bn), 2014, RHS
0
2
4
6
8
10
120
5
10
15
20
25
30
35
40
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)60
110
160
210
260
310
360
410
4600
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
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
IRR vs $ IRR vs EUR Iran REER (Dec 07=100)
Weaker
Stronger
-20
-10
0
10
20
30
40
50
60
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
Change in lending as % of GDP Real GDP (% YoY)
4.3 4.2
5.7
9.1
0.9
2.3
6.6
3.8
-6.6
-1.9
4.3
0.8
4.4 4.0 4.2
-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
Iran
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
92
Figure 252: Key data
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
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
ISXGI Index
0
5
10
15
20
25
30
35
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
Iraq
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
93
Figure 256: Population, ’000
Source: UN
Figure 257: Export destinations, total $80bn
Source: IMF
Figure 258: CPI avg %, C/A % of GDP
Source: IMF
Figure 259: Iraq – dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 260: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 261: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
0-19 65+ 20-64
0
2
4
6
8
10
12
14
16
18
20
0%
5%
10%
15%
20%
25%
Chi
na
Indi
a
EU
Eur
o A
rea
US
A
Kor
ea
Gre
ece
Italy
Tai
wan
Net
herla
nds
% of total exports Value ($bn), 2014, RHS
-20
-15
-10
-5
0
5
10
15
20-10
0
10
20
30
40
50
60
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)20
30
40
50
60
70
80
90
100
110
1201,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
Jan-
05
Sep
-05
May
-06
Jan-
07
Sep
-07
May
-08
Jan-
09
Sep
-09
May
-10
Jan-
11
Sep
-11
May
-12
Jan-
13
Sep
-13
May
-14
Jan-
15
Sep
-15
IQD vs $ IQD vs EUR Iraq REER (Dec 07=100)
Weaker
Stronger
-4
-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
Change in lending as % of GDP Real GDP (% YoY)
0.0
1.7
5.6
1.9
8.2
3.4
6.47.5
13.9
6.6
-2.1
0.0
7.18.1 7.6
-4
-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
Iraq
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 10.0 2015 FY EPS growth 4.8% Trailing P/B, x 0.7 Beta to FM 0.3 MSCI full MktCap, $bn 6.9 MSCI free float MktCap, $bn 0.7 No. of companies 3 3M ADTV, $mn, MSCI cos 1.2
Local index JOSMGNFF
MktCap, $bn 22 No. of companies 100 3M ADTV, $mn 14.1
Figure 263: Index performance
Figure 264: MSCI sector weights
Figure 265: 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 (%)
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
Figure 266: 3M ADTV, $mn
Figure 267: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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 Jordan, $
83%
10%7%
Financials Materials Telecoms
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
Jordan MSCI Jordan
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 Jordan, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)
Jordan
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
95
Figure 268: Population, ’000
Source: UN
Figure 269: Export destinations, total $8.4bn
Source: IMF
Figure 270: CPI avg %, C/A % of GDP
Source: IMF
Figure 271: Jordan – dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 272: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 273: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
US
A
Iraq
Sau
di A
rabi
a
Indi
a
EU
UA
E
Eur
o A
rea
Syr
ia
Chi
na
Kuw
ait
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 5.7 2015 FY EPS growth 18.1% Trailing P/B, x 0.7 Beta to FM 1.5 MSCI full MktCap, $bn 5.5 MSCI free float MktCap, $bn 1.7 No. of companies 3 3M ADTV, $mn, MSCI cos 2.6
Local index KZKAK
MktCap, $bn 9 No. of companies 9 3M ADTV, $mn 0.4
Figure 275: Index performance
Figure 276: MSCI sector weights
Figure 277: 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 (%)
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*
Figure 279: Valuations vs FM
*Reflects higher liquidity in DR lines Note: all forward figures for valuations are taken from Bloomberg consensus estimates.
Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
97
Figure 280: Population, ’000
Source: UN
Figure 281: Export destinations, total $55bn
Source: IMF
Figure 282: CPI avg %, C/A % of GDP
Source: IMF
Figure 283: Kazakhstan – tenge
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 284: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 285: Real GDP % change, YoY
Source: UN
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
0%
10%
20%
30%
40%
50%
60%
EU
Eur
o A
rea
Chi
na
Rus
sia
Ger
man
y
Fra
nce
Italy
Gre
ece
Rom
ania
Spa
in
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 11.2 2015 FY EPS growth 18.3% Trailing P/B, x 3.0 Beta to FM 0.7 MSCI full MktCap, $bn 11.3 MSCI free float MktCap, $bn 4.5 No. of companies 5 3M ADTV, $mn, MSCI cos 5.2
Local index NSEASI
MktCap, $bn 19 No. of companies 62 3M ADTV, $mn 7.8
Figure 287: Index performance
Figure 288: MSCI sector weights
Figure 289: 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 (%)
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 -
Figure 290: 3M ADTV, $mn
Figure 291: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
99
Figure 292: Population, ’000
Source: UN
Figure 293: Export destinations, total $6.6bn
Source: IMF
Figure 294: CPI avg %, C/A % of GDP
Source: IMF
Figure 295: Kenya – shilling
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 296: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 297: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
0%
5%
10%
15%
20%
25%
EU
Eur
o A
rea
Uga
nda
US
A
Net
herla
nds
Tan
zani
a
Zam
bia
UK
Egy
pt
Pak
ista
n
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 12.7 2015 FY EPS growth 8.3% Trailing P/B, x 1.3 Beta to FM 0.8 MSCI full MktCap, $bn 40.8 MSCI free float MktCap, $bn 19.0 No. of companies 8 3M ADTV, $mn, MSCI cos 14.6
Local index KWSEIDX
MktCap, $bn 88 No. of companies 186 3M ADTV, $mn 43.0
Figure 299: Index performance
Figure 300: MSCI sector weights
Figure 301: 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 (%)
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 -
Figure 302: 3M ADTV, $mn
Figure 303: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
101
Figure 304: Population, ’000
Source: UN
Figure 305: Export destinations, total $92bn
Source: IMF
Figure 306: CPI avg %, C/A % of GDP
Source: IMF
Figure 307: Kuwait – dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 308: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 309: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Kor
ea
Indi
a
Japa
n
US
A
Chi
na
Tai
wan EU
Eur
o A
rea
Egy
pt
Sin
gapo
re
% of total exports Value ($bn), 2014, RHS
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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 8.1 2015 FY EPS growth 2.0% Trailing P/B, x 0.8 Beta to FM 0.3 MSCI full MktCap, $bn 5.3 MSCI free float MktCap, $bn 3.0 No. of companies 4 3M ADTV, $mn, MSCI cos 1.9
Local index BLOM
MktCap, $bn 10.9 No. of companies 10 3M ADTV, $mn 2.2
Figure 311: Index performance
Figure 312: MSCI sector weights
Figure 313: Index and stock data
Ticker Name Sector MktCap FF MktCap 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)
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 -
Figure 314: 3M ADTV, $mn
Figure 315: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates.
Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
103
Figure 316: Population, ’000
Source: UN
Figure 317: Export destinations, total $3.4bn
Source: IMF
Figure 318: CPI avg %, C/A % of GDP
Source: IMF
Figure 319: Lebanon – pound
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 320: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 321: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0%
2%
4%
6%
8%
10%
12%
Sau
di A
rabi
a
EU
UA
E
Syr
ia
Eur
o A
rea
Iraq
Sou
th A
fric
a
Sw
itzer
land
Tur
key
Jord
an
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
104
Figure 322: Key data Local currency EUR
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
2015 P/E, x 13.7 2015 FY EPS growth -6.3% Trailing P/B, x 2.8 Beta to FM 0.4 MSCI full MktCap, $bn 0.8 MSCI free float MktCap, $bn 0.1 No. of companies 2 3M ADTV, $mn, MSCI cos 0.1
Local index VILSE
MktCap, $bn 2 No. of companies 23 3M ADTV, $mn 0.2
Figure 323: Index performance
Figure 324: MSCI sector weights
Figure 325: 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 (%)
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 -
Figure 326: 3M ADTV, $mn
Figure 327: Valuations vs FM*
*Insufficient data and analyst forecasts for historical forward P/E calculation Note: all forward figures for valuations are taken from Bloomberg consensus estimates.
Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
105
Figure 328: Population, ’000
Source: UN
Figure 329: Export destinations, total $32bn
Source: IMF
Figure 330: CPI avg %, C/A % of GDP
Source: IMF
Figure 331: Lithuania – litas
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 332: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 333: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
20
0%
10%
20%
30%
40%
50%
60%
EU
Eur
o A
rea
Rus
sia
Latv
ia
Pol
and
Ger
man
y
Bel
arus
Net
herla
nds
Est
onia
UK
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 8.7 2015 FY EPS growth 6.2% Trailing P/B, x 1.2 Beta to FM 0.3 MSCI full MktCap, $bn 2.1 MSCI free float MktCap, $bn 1.1 No. of companies 2 3M ADTV, $mn, MSCI cos 0.9
Local index SEMDEX
MktCap, $bn 6 No. of companies 42 3M ADTV, $mn 1.4
Figure 335: Index performance
Figure 336: MSCI sector weights
Figure 337: Index and stock data
Ticker Name Sector MktCap FF 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) MktCap (%) ($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 -
Figure 338: 3M ADTV, $mn
Figure 339: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
107
Figure 340: Population, ’000
Source: UN
Figure 341: Export destinations, total $2.6bn
Source: IMF
Figure 342: CPI avg %, C/A % of GDP
Source: IMF
Figure 343: Mauritius – rupee
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 344: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 345: Real GDP % change, YoY
Source: IMF
0
100
200
300
400
500
600
700
800
900
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0%
10%
20%
30%
40%
50%
60%
EU
Eur
o A
rea
Fra
nce
UK
UA
E
US
A
Sou
th A
fric
a
Italy
Mad
agas
car
Spa
in
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 15.6 2015 FY EPS growth 5.2% Trailing P/B, x 2.5 Beta to FM 0.3 MSCI full MktCap, $bn 32.1 MSCI free float MktCap, $bn 6.2 No. of companies 9 3M ADTV, $mn, MSCI cos 4.5
Local index MOSEMDX
MktCap, $bn 42 No. of companies 49 3M ADTV, $mn 6.0
Figure 347: Index performance
Figure 348: MSCI sector weights
Figure 349: Index and stock data
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 (%)
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 -
Figure 350: 3M ADTV, $mn
Figure 351: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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%
Financials Telecoms Materials
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
109
Figure 352: Population, ’000
Source: UN
Figure 353: Export destinations, total $23bn
Source: IMF
Figure 354: CPI avg %, C/A % of GDP
Source: IMF
Figure 355: Morocco –dirham
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 356: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 357: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
0%
10%
20%
30%
40%
50%
60%
70%
EU
Eur
o A
rea
Spa
in
Fra
nce
Bra
zil
Italy
US
A
Indi
a
UK
Ger
man
y
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 8.5 2015 FY EPS growth -3.2% Trailing P/B, x 1.5 Beta to FM 1.3 MSCI full MktCap, $bn 41.6 MSCI free float MktCap, $bn 12.8 No. of companies 17 3M ADTV, $mn, MSCI cos 12.9
Local index NGSEINDX
MktCap, $bn 51 No. of companies 179 3M ADTV, $mn 15.4
Figure 359: Index performance
Figure 360: MSCI sector weights
Figure 361: Index and stock data
Ticker Name Sector MktCap FF 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) MktCap (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)
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 -
Figure 362: 3M ADTV, $mn
Figure 363: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
111
Figure 364: Population, ’000
Source UN
Figure 365: Export destinations, total $93bn
Source: IMF
Figure 366: CPI avg %, C/A % of GDP
Source: IMF
Figure 367: Nigeria –naira
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 368: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 369: Real GDP % change, YoY
Source: IMF
0
50,000
100,000
150,000
200,000
250,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
35
40
0%
5%
10%
15%
20%
25%
30%
35%
40%
EU
Eur
o A
rea
Indi
a
Bra
zil
Net
herla
nds
Spa
in
Fra
nce
Sou
th A
fric
a
Ger
man
y
Japa
n
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)50
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 9.0 2015 FY EPS growth 2.4% Trailing P/B, x 1.2 Beta to FM 0.5 MSCI full MktCap, $bn 12.3 MSCI free float MktCap, $bn 4.9 No. of companies 9 3M ADTV, $mn, MSCI cos 8.1
Local index MSM30
MktCap, $bn 17 No. of companies 30 3M ADTV, $mn 13.1
Figure 371: Index performance
Figure 372: MSCI sector weights
Figure 373: Index and stock data
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 (%)
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 -
Figure 374: 3M ADTV, $mn
Figure 375: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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%
Financials Telecoms Materials
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
113
Figure 376: Population, ’000
Source: UN
Figure 377: Export destinations, total $54bn
Source: IMF
Figure 378: CPI avg %, C/A % of GDP
Source: IMF
Figure 379: Oman –rial
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 380: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 381: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Chi
na
UA
E
Kor
ea
Japa
n
Tai
wan
Sau
di A
rabi
a
Indi
a
Tha
iland
Pak
ista
n
US
A
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 9.2 2015 FY EPS growth -10.6% Trailing P/B, x 1.8 Beta to FM 0.7 MSCI full MktCap, $bn 28.4 MSCI free float MktCap, $bn 8.2 No. of companies 16 3M ADTV, $mn, MSCI cos 26.9
Local index KSE
MktCap, $bn 71 No. of companies 578 3M ADTV, $mn 75.5
Figure 383: Index performance
Figure 384: MSCI sector weights
Figure 385: Index and stock data
Ticker Name Sector MktCap FF 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) MktCap (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)
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 -
Figure 386: 3M ADTV, $mn
Figure 387: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
115
Figure 388: Population, ’000
Source UN
Figure 389: Export destinations, total $27b
Source: IMF
Figure 390: CPI avg %, C/A % of GDP
Source: IMF
Figure 391: Pakistan – rupee
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 392: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 393: Real GDP % change, YoY
Source: IMF
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
1
2
3
4
5
6
7
0%
5%
10%
15%
20%
25%
30%
EU
Eur
o A
rea
US
A
Chi
na
UA
E
Afg
hani
stan UK
Ger
man
y
Spa
in
Sau
di A
rabi
a
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 19.8 2015 FY EPS growth 5.2% Trailing P/B, x 2.8 Beta to EM 0.7 MSCI full MktCap, $bn 151.7 MSCI free float MktCap, $bn 48.9 No. of companies 21 3M ADTV, $mn, MSCI cos 95.9
Local index PCOMP
MktCap, $bn 174.4 No. of companies 30 3M ADTV, $mn 110.7
Figure 395: Index performance
Figure 396: MSCI sector weights
Figure 397: 3M ADTV, $mn
Figure 398: Valuations vs EM
Figure 399: Non-ETF allocations to Indonesia in GEM funds relative to MSCI weight, %
Figure 400: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Philippines
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
117
Figure 401: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
118
Figure 402: Population, ’000
Source: UN
Figure 403: Export destinations, total $61.8bn
Source: IMF
Figure 404: CPI avg %, C/A % of GDP
Source: IMF
Figure 405: Philippines – peso
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 406: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 407: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
0%
5%
10%
15%
20%
25%
Japa
n
US
A
Chi
na EU
Eur
o A
rea
Hon
g K
ong
Sin
gapo
re
Ger
man
y
Kor
ea
Tai
wan
% of total exports Value ($bn), 2014, RHS
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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
119
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 294.5 No. of companies 387 3M ADTV, $mn 220.5
Figure 409: Index performance
Figure 410: MSCI sector weights
*Excludes negative to positive EPS changes
Figure 411: 3M ADTV, $mn
Figure 412: Valuations vs EM
Figure 413: Non-ETF allocations to Poland in GEM funds relative to MSCI weight, %
Figure 414: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Poland
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
121
Figure 415: Index and stock data
Ticker Name Sector MktCap ($mn)
FF MktCap ($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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
122
Figure 416: Population, ’000
Source: UN
Figure 417: Export destinations, total $208.8bn
Source: IMF
Figure 418: CPI avg %, C/A % of GDP
Source: IMF
Figure 419: Poland – zloty
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 420: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 421: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
20
40
60
80
100
120
140
160
180
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
EU
Eur
o A
rea
Ger
man
y
UK
Cze
ch R
epub
lic
Fra
nce
Italy
Net
herla
nds
Rus
sia
Sw
eden
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)70
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
123
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 16.1 2015 FY EPS growth -15.2% Trailing P/B, x 1.4 Beta to EM 0.2 MSCI full MktCap, $bn 123.6 MSCI free float MktCap, $bn 37.2 No. of companies 13 3M ADTV, $mn, MSCI cos 60.2
Local index DSM
MktCap, $bn 139.7 No. of companies 20 3M ADTV, $mn 71.5
Figure 423: Index performance
Figure 424: MSCI sector weights
Figure 425: 3M ADTV, $mn
Figure 426: Valuations vs EM
Figure 427: Non-ETF allocations to UAE and Qatar in GEM funds relative to MSCI weight, %
Figure 428: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
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
Expected 2015 earnings Expected 2016 earnings
Qatar
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
125
Figure 429: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
126
Figure 430: Population, ’000
Source: UN
Figure 431: Export destinations, total $120.3bn
Source: IMF
Figure 432: CPI avg %, C/A % of GDP
Source: IMF
Figure 433: Qatar – riyal
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 434: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 435: Real GDP % change, YoY
Source: IMF
0
500
1,000
1,500
2,000
2,500
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
35
0%
5%
10%
15%
20%
25%
30%
Japa
n
Kor
ea
Indi
a
EU
Chi
na
Sin
gapo
re
UA
E
Eur
o A
rea
Tai
wan
Tha
iland
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)90
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
127
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 8.3 2015 FY EPS growth 25.0% Trailing P/B, x 1.3 Beta to FM 1.0 MSCI full MktCap, $bn 12.3 MSCI free float MktCap, $bn 3.2 No. of companies 5 3M ADTV, $mn, MSCI cos 6.0
Local index BET
MktCap, $bn 16 No. of companies 10 3M ADTV, $mn 8.2
Figure 437: Index performance
Figure 438: MSCI sector weights
Figure 439: 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 (%)
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 -
Figure 440: 3M ADTV, $mn
Figure 441: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
129
Figure 442: Population, ’000
Source: UN
Figure 443: Export destinations, total $69bn
Source: IMF
Figure 444: CPI avg %, C/A % of GDP
Source: IMF
Figure 445: Romania –leu
Source: Bruegel, Bloomberg
Figure 446: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 447: Real GDP % change, YoY
Source: IMF
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
10
20
30
40
50
60
0%
10%
20%
30%
40%
50%
60%
70%
80%
EU
Eur
o A
rea
Ger
man
y
Italy
Fra
nce
Hun
gary
Tur
key
UK
Bul
garia
Rus
sia
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)60
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
Change in lending as % of GDP Real GDP (% YoY)8.4
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 417.2 No. of companies 50 3M ADTV, $mn 492.8
Figure 449: Index performance
Figure 450: MSCI sector weights
Figure 451: 3M ADTV, $mn
Figure 452: Valuations vs EM
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)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
131
Figure 455: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
132
Figure 456: Population, ’000
Source: UN
Figure 457: Export destinations, total $482.3bn
Source: IMF
Figure 458: CPI avg %, C/A % of GDP
Source: IMF
Figure 459: Russia – rouble
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 460: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 461: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
50
100
150
200
250
300
0%
10%
20%
30%
40%
50%
60%
EU
Eur
o A
rea
Net
herla
nds
Chi
na
Ger
man
y
Italy
Tur
key
Bel
arus
Japa
n
Kor
ea
% of total exports Value ($bn), 2014, RHS
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
Current account balance (% of GDP) RHS CPI (average % YoY)40
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
133
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
134
Figure 462: Key data
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
135
Figure 466: Population, ’000
Source: UN
Figure 467: Export destinations, total $0.45bn
Source: IMF
Figure 468: CPI avg %, C/A % of GDP
Source: IMF
Figure 469: Rwanda – franc
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 470: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 471: Real GDP % change, YoY
Source: IMF
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Chi
na
DR
Con
go EU
Mal
aysi
a
Eur
o A
rea
Tha
iland
US
A
Sw
azila
nd
Ger
man
y
Pak
ista
n
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 13.0 2015 FY EPS growth -2.8% Trailing P/B, x 1.5 Beta to FM 0.5 MSCI full MktCap, $bn 353.6 MSCI free float MktCap, $bn 135.2 No. of companies 44 3M ADTV, $mn, MSCI cos 766.0
Local index SASEIDX
MktCap, $bn 423.0 No. of companies 171 3M ADTV, $mn 1255.5
Figure 473: Index performance
Figure 474: MSCI sector weights
MSCI Saudi Arabia is a standalone index, and not part of the MSCI Frontier Index.
Figure 475: 3M ADTV, $mn
Figure 476: Valuations vs FM
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, %
Figure 478: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Saudi Arabia
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
137
Figure 479: Index and stock data
Ticker Name Sector MktCap FF MktCap 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI
($mn) (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
138
Figure 480: Population, ’000
Source: UN
Figure 481: Export destinations, total $333bn
Source: IMF
Figure 482: CPI avg %, C/A % of GDP
Source: IMF
Figure 483: Saudi Arabia –riyal
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 484: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 485: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
35
40
45
50
0%
2%
4%
6%
8%
10%
12%
14%
Chi
na
Japa
n
US
A
EU
Kor
ea
Eur
o A
rea
Indi
a
Sin
gapo
re
Tai
wan
Fra
nce
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
139
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
140
Figure 486: Key data Local currency RSD
GDP/capita, $ (2014) 6,123 Population, mn (2014) 7.2 S&P/Moody's rating BB-/B1 Weight in MSCI FM, % 0.2
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
MktCap, $bn 3 No. of companies 13 3M ADTV, $mn 0.7
Figure 487: Index performance
Figure 488: MSCI sector weights
Figure 489: 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 (%)
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 -
Figure 490: 3M ADTV, $mn
Figure 491: Valuations vs FM*
*Insufficient data and analyst forecasts for historical forward P/E calculation Note: all forward figures for valuations are taken from Bloomberg consensus estimates.
Source for all charts: Bloomberg
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
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
N/A
Serbia
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
141
Figure 492: Population, ’000
Source: UN
Figure 493: Export destinations, total $15bn
Source: IMF
Figure 494: CPI avg %, C/A % of GDP
Source: IMF
Figure 495: Serbia –dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 496: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 497: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
0%
10%
20%
30%
40%
50%
60%
70%
EU
Eur
o A
rea
Italy
Ger
man
y
Bos
nia
and
Her
z.
Rus
sia
Rom
ania
Mon
tene
gro
Mac
edon
ia, F
YR
Slo
veni
a
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)0
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 10.6 2015 FY EPS growth 13.7% Trailing P/B, x 1.3 Beta to FM 0.8 MSCI full MktCap, $bn 3.5 MSCI free float MktCap, $bn 2.1 No. of companies 3 3M ADTV, $mn, MSCI cos 0.6
Local index SBITOP
MktCap, $bn 5 No. of companies 7 3M ADTV, $mn 0.8
Figure 499: Index performance
Figure 500: MSCI sector weights
Figure 501: Index and stock data
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 (%)
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 -
Figure 502: 3M ADTV, $mn
Figure 503: 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
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
143
Figure 504: Population, ’000
Source: UN
Figure 505: Export destinations, total $36bn
Source: IMF
Figure 506: CPI avg %, C/A % of GDP
Source: IMF
Figure 507: Slovenia –euro
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 508: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 509: Real GDP % change, YoY
Source: IMF
0
200
400
600
800
1,000
1,200
1,400
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
0%
10%
20%
30%
40%
50%
60%
70%
80%
EU
Eur
o A
rea
Ger
man
y
Italy
Aus
tria
Cro
atia
Hun
gary
Fra
nce
Rus
sia
Slo
vaki
a
% of total exports Value ($bn), 2014, RHS
-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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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 511: Index performance
Figure 512: MSCI sector weights
Figure 513: 3M ADTV, $mn
Figure 514: Valuations vs EM
Figure 515: Non-ETF allocations to South Africa in GEM funds relative to MSCI weight, %
Figure 516: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
South Africa
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
145
Figure 517: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
146
Figure 518: Population, ’000
Source: UN
Figure 519: Export destinations, total $83.9bn
Source: IMF
Figure 520: CPI avg %, C/A % of GDP
Source: IMF
Figure 521: South Africa – rand
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 522: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 523: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
0%
5%
10%
15%
20%
25%
EU
Eur
o A
rea
Chi
na
US
A
Japa
n
Bot
swan
a
Ger
man
y
Nam
ibia
Indi
a
UK
% of total exports Value ($bn), 2014, RHS
-7
-6
-5
-4
-3
-2
-1
00
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
Current account balance (% of GDP) RHS CPI (average % YoY)60
70
80
90
100
110
120
130
1404
6
8
10
12
14
16
18
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
ZAR vs $ ZAR vs EUR South Africa 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
Change in lending as % of GDP Real GDP (% YoY)
4.6
5.35.6
5.4
3.2
-1.5
3.0 3.2
2.2 2.2
1.5 1.4 1.3
2.12.5
-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
South Africa
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
147
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 21 No. of companies 287 3M ADTV, $mn 7.5
Figure 525: Index performance
Figure 526: MSCI sector weights
Figure 527: 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 (%)
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 -
Figure 528: 3M ADTV, $mn
Figure 529: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
60
80
100
120
140
160
180
200
220
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 Sri Lanka, $
62%
33%
5%
Industrials Financials Cons. Staples
0
5
10
15
20
25
30
35
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
Sri Lanka MSCI Sri Lanka
0
5
10
15
20
25
30
35
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 Sri Lanka, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)
Sri Lanka
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
149
Figure 530: Population, ’000
Source: UN
Figure 531: Export destinations, total $10.9bn
Source: IMF
Figure 532: CPI avg %, C/A % of GDP
Source: IMF
Figure 533: Sri Lanka – rupee
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 534: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 535: Real GDP % change, YoY
Source: IMF
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0%
5%
10%
15%
20%
25%
30%
35%
EU
US
A
Eur
o A
rea
UK
Indi
a
Italy
Ger
man
y
Bel
gium
Rus
sia
UA
E
% of total exports Value ($bn), 2014, RHS
-12
-10
-8
-6
-4
-2
00
5
10
15
20
25
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
90
100
110
120
13060
80
100
120
140
160
180
200
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
LKR vs $ LKR vs EUR Sri Lanka REER (Dec 07=100)
Weaker
Stronger
-4
-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)
5.4
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 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
Sri Lanka
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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 537: Index performance
Figure 538: Local index sector weights
Figure 539: Index and stock data
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 (%)
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 -
Figure 540: 3M ADTV, $mn
Figure 541: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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
MSCI Frontier, $ Tanzania, $
61%
29%
4%
3%
3%
Cons. Staples Financials Materials
Cons. Disc. Industrials
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
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
Tanzania 3M ADTV ($mn)
0
2
4
6
8
10
12
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
151
Figure 542: Population, ’000
Source: UN
Figure 543: Export destinations, total $4bn
Source: IMF
Figure 544: CPI avg %, C/A % of GDP
Source: IMF
Figure 545: Tanzania –shilling
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 546: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 547: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0%
5%
10%
15%
20%
25%
Indi
a
EU
Eur
o A
rea
Chi
na
Japa
n
Ger
man
y
UA
E
Bel
gium
Ken
ya
Zam
bia
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
90
100
110
120
130
140
150
160
170500
1,000
1,500
2,000
2,500
3,000
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
TZS vs $ TZS vs EUR Tanzania 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)
7.2
6.5
4.7
8.5
5.6 5.4
6.4
7.9
5.1
7.37.0 6.9 7.0 7.0 6.9
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
Tanzania
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 9.8 2015 FY EPS growth 18.1% Trailing P/B, x 2.1 Beta to FM 0.1 MSCI full MktCap, $bn 1.4 MSCI free float MktCap, $bn 0.6 No. of companies 2 3M ADTV, $mn, MSCI cos 0.1
Local index TUSISE
MktCap, $bn 7 No. of companies 56 3M ADTV, $mn 1.5
Figure 549: Index performance
Figure 550: MSCI sector weights
Figure 551: 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 (%)
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 -
Figure 552: 3M ADTV, $mn
Figure 553: Valuations vs FM*
*Insufficient data and analyst forecasts for historical forward P/E calculation Note: all forward figures for valuations are taken from Bloomberg consensus estimates.
Source for all charts: Bloomberg
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
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
N/A
Tunisia
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
153
Figure 554: Population, ’000
Source: UN
Figure 555: Export destinations, total $15bn
Source: IMF
Figure 556: CPI avg %, C/A % of GDP
Source: IMF
Figure 557: Tunisia – dinar
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 558: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 559: Real GDP % change, YoY
Source: IMF
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
0%
10%
20%
30%
40%
50%
60%
70%
80%
EU
Eur
o A
rea
Fra
nce
Italy
Ger
man
y
Liby
a
US
A
Alg
eria
Spa
in
UK
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)6.0
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 10.8 2015 FY EPS growth 7.2% Trailing P/B, x 1.5 Beta to EM 1.1 MSCI full MktCap, $bn 148.7 MSCI free float MktCap, $bn 56.1 No. of companies 25 3M ADTV, $mn, MSCI cos 820.3
Local index XU100
MktCap, $bn 182.5 No. of companies 100 3M ADTV, $mn 1067.1
Figure 561: Index performance
Figure 562: MSCI sector weights
Figure 563: 3M ADTV, $mn
Figure 564: Valuations vs EM
Figure 565: Non-ETF allocations to Turkey in GEM funds relative to MSCI weight, %
Figure 566: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
Turkey
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
155
Figure 567: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
156
Figure 568: Population, ’000
Source: UN
Figure 569: Export destinations, total $157.6bn
Source: IMF
Figure 570: CPI avg %, C/A % of GDP
Source: IMF
Figure 571: Turkey – lira
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 572: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 573: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
10
20
30
40
50
60
70
80
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
EU
Eur
o A
rea
Ger
man
y
Iraq UK
Italy
Fra
nce
US
A
Rus
sia
Spa
in
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)50
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
157
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
2015 P/E, x 12.1 2015 FY EPS growth -2.9% Trailing P/B, x 1.4 Beta to EM 0.5 MSCI full MktCap, $bn 95.5 MSCI free float MktCap, $bn 25.4 No. of companies 10 3M ADTV, $mn, MSCI cos 78.8
Local index ADSMI/ DFMGI
MktCap, $bn 203.8 No. of companies 100 3M ADTV, $mn 103.4
Figure 575: Index performance
Figure 576: MSCI sector weights
Figure 577: 3M ADTV, $mn
Figure 578: Valuations vs EM
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, %
Figure 580: Changes in consensus earnings, past 12 months (Nov 2014 = 100)
Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR
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
Expected 2015 earnings Expected 2016 earnings
UAE
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
159
Figure 581: 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 (%)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
160
Figure 582: Population, ’000
Source: UN
Figure 583: Export destinations, total $258.3bn
Source: IMF
Figure 584: CPI avg %, C/A % of GDP
Source: IMF
Figure 585: UAE – dirham
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 586: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 587: Real GDP % change, YoY
Source: IMF
0
2,000
4,000
6,000
8,000
10,000
12,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
35
40
0%
2%
4%
6%
8%
10%
12%
14%
16%
Japa
n
Iran
Indi
a
Kor
ea
Chi
na
Sin
gapo
re
Tha
iland
Om
an EU
Eur
o A
rea
% of total exports Value ($bn), 2014, RHS
0
5
10
15
20
250
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
Current account balance (% of GDP) RHS CPI (average % YoY)90
95
100
105
110
115
1203.0
3.5
4.0
4.5
5.0
5.5
6.0
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
AED vs $ AED vs EUR UAE REER (Dec 07=100)
Weaker
Stronger
-10
-5
0
5
10
15
20
25
30
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
Change in lending as % of GDP Real GDP (% YoY)
9.6
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 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
UAE
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
161
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Figure 589: Index performance
Figure 590: Local index sector weights
Figure 591: Index and stock data
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 (%)
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 -
Figure 592: 3M ADTV, $mn
Figure 593: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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, $ 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
1.4
1.6
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
Uganda
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
UGSINDX Index 12M Fwd PE (x) Frontier
Uganda
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
163
Figure 594: Population, ’000
Source: UN
Figure 595: Export destinations, total $2bn
Source: IMF
Figure 596: CPI avg %, C/A % of GDP
Source: IMF
Figure 597: Uganda – shilling
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 598: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 599: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0%
5%
10%
15%
20%
25%
30%
EU
Eur
o A
rea
Rw
anda
UA
E
DR
Con
go
Ken
ya
Net
herla
nds
Ger
man
y
Italy
Chi
na
% of total exports Value ($bn), 2014, RHS
-14
-12
-10
-8
-6
-4
-2
00
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
Current account balance (% of GDP) RHS CPI (average % YoY)80
85
90
95
100
105
110
115
120
125
1301,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
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
UGX vs $ UGX vs EUR Uganda 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
Change in lending as % of GDP Real GDP (% YoY)
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
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
Uganda
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
MktCap, $bn 2.1 No. of companies 20 3M ADTV, $mn 0.1
Figure 601: Index performance
Figure 602: MSCI sector weights
*As of September 2015, MSCI Ukraine is a standalone index and not included in the MSCI Frontier Index
Figure 603: Index and stock data
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 (%)
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 -
Figure 604: 3M ADTV, $mn
Figure 605: Valuations vs FM
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
60
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 Ukraine, $
51%49%
Energy Industrials
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
Ukraine 3M ADTV ($mn) MSCI Ukraine, 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 Ukraine 12M Fwd PE (x) Frontier
Ukraine
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
165
Figure 606: Population, ’000
Source: UN
Figure 607: Export destinations, total $54bn
Source: IMF
Figure 608: CPI avg %, C/A % of GDP
Source: IMF
Figure 609: Ukraine – hryvnia
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 610: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 611: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
2
4
6
8
10
12
14
16
18
0%
5%
10%
15%
20%
25%
30%
35%
EU
Rus
sia
Eur
o A
rea
Tur
key
Egy
pt
Chi
na
Pol
and
Italy
Indi
a
Bel
arus
% of total exports Value ($bn), 2014, RHS
-15
-10
-5
0
5
10
15-10
0
10
20
30
40
50
60
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)40
50
60
70
80
90
100
110
120
130
1400
5
10
15
20
25
30
35
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
UAH vs $ UAH vs EUR Ukraine 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
Change in lending as % of GDP Real GDP (% YoY)11.8
3.1
7.6 8.2
2.2
-15.1
0.3
5.5
0.2
0.0
-6.8-9.0
2.03.5 4.0
-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
Ukraine
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
166
Figure 612: Key data Local currency VND
GDP/capita, $ (2014) 2,051 Population, mn (2014) 90.6 S&P/Moody's rating BB-/B1 Weight in MSCI FM, % 4.1
MSCI Index MXVI
2015 P/E, x 18.7 2015 FY EPS growth -14.0% Trailing P/B, x 2.2 Beta to FM 0.9 MSCI full MktCap, $bn 24.1 MSCI free float MktCap, $bn 3.6 No. of companies 10 3M ADTV, $mn, MSCI cos 14.9
Local index VNINDEX
MktCap, $bn 53 No. of companies 308 3M ADTV, $mn 75.8
Figure 613: Index performance
Figure 614: MSCI sector weights
Figure 615: 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 (%)
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 -
Figure 616: 3M ADTV, $mn
Figure 617: Valuations vs FM
Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg
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 Vietnam, $
63%
24%
6%
4%
3%
Financials Cons. Staples Materials
Energy Utilities
0
20
40
60
80
100
120
140
160
180
200
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
Vietnam MSCI Vietnam
5
7
9
11
13
15
17
19
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 Vietnam, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)
Vietnam
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
167
Figure 618: Population, ’000
Source: UN
Figure 619: Export destinations, total $146bn
Source: IMF
Figure 620: CPI avg %, C/A % of GDP
Source: IMF
Figure 621: Vietnam – dong
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 622: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 623: Real GDP % change, YoY
Source: IMF
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1,99
0
1,99
5
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0
5
10
15
20
25
30
0%
5%
10%
15%
20%
25%
US
A
EU
Eur
o A
rea
Chi
na
Japa
n
Kor
ea
Ger
man
y
Hon
g K
ong
Aus
tral
ia
Mal
aysi
a
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)80
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Figure 625: Index performance
Figure 626: Local index sector weights
Figure 627: Index and stock data
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 (%)
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 -
Figure 628: 3M ADTV, $mn
Figure 629: Valuations vs FM*
*Insufficient data and analyst forecasts for historical forward P/E calculation
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, $ 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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
169
Figure 630: Population, ’000
Source: UN
Figure 631: Export destinations, total $8.2bn
Source: IMF
Figure 632: CPI avg %, C/A % of GDP
Source: IMF
Figure 633: Zambia – kwacha
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 634: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 635: Real GDP % change, YoY
Source: IMF
0
5,000
10,000
15,000
20,000
25,000
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
0-19 20-64 65+
0.0
0.5
1.0
1.5
2.0
2.5
0%
5%
10%
15%
20%
25%
Sw
itzer
land
Chi
na
DR
Con
go
Sou
th A
fric
a
UA
E
EU
Zim
babw
e
Eur
o A
rea
Nam
ibia
Kor
ea
% of total exports Value ($bn), 2014, RHS
-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
Current account balance (% of GDP) RHS CPI (average % YoY)50
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
Change in lending as % of GDP Real GDP (% YoY)
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
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
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
Figure 637: Index performance
Figure 638: MSCI sector weights
*MSCI Zimbabwe is a standalone index and not included in the MSCI Frontier Index
Figure 639: Index and stock data
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 (%)
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%
Figure 640: 3M ADTV, $mn
Figure 641: Valuations vs FM*
*Insufficient data and analyst forecasts for historical forward P/E calculation
Source for all charts: Bloomberg
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)
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
N/A
Zimbabwe
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
171
Figure 642: Population, ’000
Source: UN
Figure 643: Export destinations, total $2.7bn
Source: IMF
Figure 644: CPI avg %, C/A % of GDP
Source: IMF
Figure 645: Zimbabwe ($ or ZAR)
Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)
Figure 646: Bank lending growth vs GDP
Source: IMF, Renaissance Capital
Figure 647: Real GDP % change, YoY
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
% of total exports Value ($bn), 2014, RHS
-50
-45
-40
-35
-30
-25
-20
-15
-10
-5
0-100
-50
0
50
100
150
200
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
2017
E
2018
E
Current account balance (% of GDP) RHS CPI (average % YoY)
70
80
90
100
110
120
130
140
Jan-
00
Nov
-00
Sep
-01
Jul-0
2
May
-03
Mar
-04
Jan-
05
Nov
-05
Sep
-06
Jul-0
7
May
-08
Mar
-09
Jan-
10
Nov
-10
Sep
-11
Jul-1
2
May
-13
Mar
-14
Jan-
15
Zimbabwe REER (Dec 07=100)
Weaker
Stronger
-20
-15
-10
-5
0
5
10
15
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
Change in lending as % of GDP Real GDP (% YoY)
-6.5-7.7
-3.6 -3.4
-16.6
7.5
11.4 11.910.6
4.53.3
1.42.4 3.0 3.3
-20
-15
-10
-5
0
5
10
15
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E
2016
E
2017
E
2018
E
Zimbabwe
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
172
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
173
Key economic indicators
Key e
co
no
mic
in
dic
ato
rs
Argentina 648
Figure 648: Argentina key economic indicators
Ratings (M/S&P/F) Caa1/SD/RD
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 9.2 8.4 8.0 3.1 0.1 9.5 8.4 0.8 2.9 0.5 0.4 -0.7 0.0
Investment (% GDP) 19.1 20.9 22.2 21.0 16.1 19.1 19.7 17.0 18.6 19.9 17.4 16.4 15.5
Unemployment rate year-end (%) 11.6 10.2 8.5 7.9 8.7 7.8 7.2 7.2 7.1 7.3 6.9 8.4 8.7
Nominal GDP (lcl bn) 647 809 1,027 1,284 1,412 1,811 2,312 2,766 3,406 4,412 5,236 6,463 8,032
Nominal GDP ($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
Renaissance Capital 11 November 2015
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
Gross domestic saving (% of GDP) 36.0 42.2 48.1 43.9 28.6 30.3 27.5 27.3 24.7 19.6 12.8 13.3 16.1
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 24.2 20.3 16.3 12.6 21.4 29.7 32.5 36.2 43.5 43.8 66.7 77.8 85.9
External indicators
Exports ($bn) 15.9 19.8 24.1 28.8 22.8 29.5 33.5 35.3 35.9 37.1 na na na
Imports ($bn) 6.1 7.0 8.5 11.9 9.2 11.6 12.7 13.9 13.7 14.6 na na na
Trade balance ($bn) 9.8 12.7 15.6 16.9 13.6 17.9 20.8 21.4 22.3 22.5 na na na
Trade balance (% of GDP) 61.1 68.7 71.6 65.8 59.3 69.5 71.8 69.7 67.7 66.3 na na na
Current account balance ($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 ($bn) -0.1 1.9 0.1 0.2 2.0 -0.2 -0.1 0.0 -0.1 1.0 na na na
Net FDI (% of GDP) -0.5 10.5 0.4 0.7 8.9 -0.7 -0.4 -0.1 -0.2 3.1 na na na
C/A balance plus FDI (% of GDP) 8.7 22.3 13.8 9.5 11.4 2.3 10.8 7.1 7.6 6.4 na na na
Exports (% YoY, value) 18.6 24.3 21.8 19.8 -20.9 29.3 13.7 5.4 1.7 3.2 na na na
Imports (% YoY, value) 19.4 14.8 20.9 40.1 -22.8 26.1 9.3 9.7 -1.6 6.8 na na na
FX reserves (ex gold, US$bn) 2.0 2.8 4.2 3.9 3.8 5.1 4.5 5.2 5.3 6.0 na na na
Import cover (months of imports) 3.9 4.8 5.9 3.9 5.0 5.3 4.3 4.5 4.7 5.0 na na na
Currency and monetary policy
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
Exchange rate (EUR) annual average 0.47 0.47 0.52 0.55 0.52 0.50 0.52 0.48 0.50 0.50 0.42 0.42 0.43
Exchange rate ($) annual average 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
175
Bangladesh 650
Figure 650: Bangladesh key economic indicators
Ratings (M/S&P/F) Ba3/BB-/BB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 6.3 6.9 6.5 5.5 5.3 6.0 6.5 6.3 6.0 6.3 6.5 6.8 7.0
Investment (% GDP) 26.1 26.2 26.2 26.2 26.2 26.9 27.9 28.3 28.5 28.8 29.5 30.8 32.2
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 4,562 5,161 5,892 6,669 7,513 8,567 9,855 11,271 12,713 14,286 16,174 18,478 21,187
Nominal GDP ($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 ($) 495 523 584 656 728 808 857 916 1,030 1,162 1,266 1,356 1,463
Stock of bank credit (lcl, bn) 1,414 1,665 1,892 2,284 2,712 3,473 4,114 4,790 5,189 5,937 6,649 7,314 na
Lending/GDP (%) 31.0 32.3 32.1 34.2 36.1 40.5 41.7 42.5 40.8 41.6 41.1 39.6 na
Gross domestic saving (% of GDP) 27.1 27.9 27.8 28.2 29.0 29.1 29.4 30.2 29.8 29.1 28.9 29.7 31.0
Prices
CPI (average % YoY) 7.0 6.8 9.1 8.9 4.9 9.4 11.5 6.2 7.5 7.0 6.4 6.6 6.8
CPI (year-end, % YoY) 7.1 6.1 11.6 6.7 7.7 11.6 7.6 7.1 7.3 6.1 6.5 6.8 6.8
Fiscal balance (% of GDP)
Consolidated government balance -2.9 -2.6 -2.2 -4.0 -3.2 -2.7 -3.6 -3.0 -3.4 -3.1 -3.2 -3.8 -3.6
Total public debt (% of GDP) 42.3 42.3 41.9 40.6 39.5 36.6 35.3 33.8 34.5 33.9 33.3 33.0 32.4
External indicators
Exports ($bn) 8.5 11.7 12.7 13.6 14.4 16.5 23.1 22.3 25.9 28.4 na na na
Imports ($bn) 13.9 16.1 18.5 23.8 21.9 27.8 36.2 34.2 37.5 41.6 na na na
Trade balance ($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
Net FDI (% of GDP) 1.1 1.0 0.8 1.1 0.7 0.7 0.9 0.9 1.0 0.9 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
FX reserves (ex gold, US$bn) 2.8 3.8 5.2 5.7 10.2 10.6 8.5 12.0 17.6 21.8 na na na
Import cover (months of imports) 2.4 2.8 3.4 2.9 5.6 4.6 2.8 4.2 5.6 6.3 na na na
Currency and monetary policy
Key policy rate (% YE) na na na 8.8 4.5 5.5 7.3 7.8 7.3 7.3 na na na
Broad money growth (%YoY) 15.8 20.2 13.5 16.4 20.2 21.1 16.9 17.0 14.8 15.4 na na na
Exchange rate (EUR) annual average 80.1 85.5 94.3 101.1 96.1 93.1 104.6 102.2 104.7 103.3 88.9 94.3 100.3
Exchange rate ($) annual average 64.3 68.1 68.8 68.7 69.0 70.2 75.2 79.5 78.8 77.7 79.9 84.4 88.8
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 10.2 9.0 6.9 5.7 6.9 10.3 11.4 12.4 13.0 11.5 10.3 9.7 9.3
Nominal GDP (lcl bn) 46.1 52.5 62.4 71.3 70.6 71.9 78.4 80.0 80.3 82.2 82.9 85.0 87.8
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
Stock of bank credit (lcl, bn) 18.7 23.3 37.8 49.7 51.6 52.3 54.3 55.8 55.9 51.6 54.2 56.9 na
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
Gross domestic saving (% of GDP) 16.6 15.3 9.7 15.1 20.8 21.8 21.9 21.1 23.8 21.6 22.7 22.4 22.3
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 29.0 23.1 17.9 15.0 15.1 14.6 14.8 17.1 17.6 26.9 28.6 29.6 29.8
External indicators
Exports ($bn) 11.7 15.1 18.6 22.5 16.4 20.1 27.7 26.2 29.1 28.8 na na na
Imports ($bn) 18.2 19.6 30.1 37.0 23.5 25.2 32.2 32.4 34.0 34.2 na na na
Trade balance ($bn) -6.5 -4.4 -11.5 -14.5 -7.2 -5.1 -4.5 -6.2 -4.9 -5.4 na na na
Trade balance (% of GDP) -22.0 -13.1 -26.3 -27.1 -14.3 -10.5 -8.1 -11.7 -9.0 -9.6 na na na
Current account balance ($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 ($bn) 4.0 7.6 12.9 9.2 3.5 1.3 1.6 1.0 1.3 1.2 na na na
Net FDI (% of GDP) 13.6 22.5 29.5 17.1 7.0 2.6 2.9 2.0 2.3 2.2 na na na
C/A balance plus FDI (% of GDP) 2.2 5.2 5.2 -5.3 -1.6 1.2 3.0 0.8 4.6 2.2 na na na
Exports (% YoY, value) 19.0 29.0 22.7 21.1 -27.2 22.5 38.0 -5.3 11.0 -1.0 na na na
Imports (% YoY, value) 26.4 7.5 53.8 23.1 -36.4 7.1 27.8 0.5 5.1 0.5 na na na
FX reserves (ex gold, US$bn) 8.0 10.9 16.5 16.8 17.1 15.4 15.3 18.4 18.3 18.6 na na na
Import cover (months of imports) 5.3 6.7 6.6 5.4 8.7 7.3 5.7 6.8 6.5 6.5 na na na
Currency and monetary policy
Key policy rate (% YE) 2.1 3.3 4.6 5.8 0.6 0.2 0.2 0.0 0.0 0.0 na na na
Broad money growth (%YoY) 23.9 26.9 31.2 8.8 4.2 6.4 12.2 8.4 8.9 1.1 na na na
Exchange rate (EUR) annual average 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96
Exchange rate ($) annual average 1.57 1.56 1.43 1.33 1.40 1.47 1.41 1.52 1.47 1.47 1.76 1.75 1.73
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
177
Croatia 652
Figure 652: Croatia key economic indicators
Ratings (M/S&P/F) Ba1/BB/BB
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.2 4.8 5.2 2.1 -7.4 -1.7 -0.3 -2.2 -1.1 -0.4 0.8 1.0 1.7
Investment (% GDP) 27.9 29.8 29.7 31.4 25.0 21.4 20.6 19.3 19.1 18.2 17.7 17.7 17.7
Unemployment rate year-end (%) 13.1 11.6 9.6 8.6 8.9 11.5 13.3 15.2 17.0 17.1 16.6 16.1 15.6
Nominal GDP (lcl bn) 270.2 294.4 322.3 347.7 331.0 328.0 332.6 330.5 329.6 328.4 332.0 339.2 350.3
Nominal GDP ($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 ($) 10,524 11,694 13,944 16,346 14,562 13,895 14,523 13,234 13,569 13,473 11,551 11,813 12,322
Stock of bank credit (lcl, bn) 148.5 182.9 210.4 233.1 231.8 255.9 268.7 258.2 253.3 248.3 245.8 254.4 na
Lending/GDP (%) 55.0 62.1 65.3 67.0 70.0 78.0 80.8 78.1 76.8 75.6 74.0 75.0 na
Gross domestic saving (% of GDP) 22.8 23.3 22.6 22.6 19.9 20.2 19.8 19.1 19.9 18.9 19.4 19.2 18.8
Prices
CPI (average % YoY) 3.3 3.2 2.9 6.1 2.4 1.0 2.3 3.4 2.2 -0.2 -0.4 1.1 1.4
CPI (year-end, % YoY) 3.7 2.1 5.8 2.8 1.9 1.9 2.0 4.7 0.3 -0.5 0.4 1.3 1.7
Fiscal balance (% of GDP)
Consolidated government balance -3.7 -3.4 -2.5 -2.7 -5.9 -6.0 -7.5 -5.3 -5.4 -5.7 -5.1 -4.4 -3.6
Total public debt (% of GDP) 38.6 36.1 34.4 36.0 44.5 52.8 63.7 69.2 80.8 85.1 89.3 91.8 92.5
External indicators
Exports ($bn) 8.8 10.2 12.4 14.0 10.4 11.5 13.4 11.9 11.8 13.7 na na na
Imports ($bn) 18.6 21.4 25.8 30.7 21.1 20.0 22.7 20.7 20.9 22.5 na na na
Trade balance ($bn) -9.8 -11.2 -13.5 -16.7 -10.7 -8.5 -9.3 -8.8 -9.1 -8.8 na na na
Trade balance (% of GDP) -21.6 -22.3 -22.4 -23.7 -17.1 -14.2 -15.0 -15.6 -15.7 -15.5 na na na
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
Net FDI (% of GDP) 3.4 5.9 7.7 6.4 3.2 1.1 2.4 2.7 2.0 2.7 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
FX reserves (ex gold, US$bn) 8.8 11.5 13.7 13.0 14.9 14.1 14.5 14.8 17.8 15.4 na na na
Import cover (months of imports) 5.7 6.4 6.4 5.1 8.5 8.5 7.7 8.6 10.2 8.2 na na na
Currency and monetary policy
Key policy rate (% YE) 4.5 4.5 9.0 9.0 9.0 9.0 7.0 7.0 7.0 7.0 na na na
Broad money growth (%YoY) 10.6 18.1 18.3 4.4 -0.6 12.6 1.5 3.2 -13.7 -0.1 na na na
Exchange rate (EUR) annual average 7.42 7.33 7.35 7.26 7.36 7.30 7.44 7.52 7.58 7.65 7.55 7.58 7.59
Exchange rate ($) annual average 5.95 5.84 5.36 4.93 5.28 5.50 5.35 5.85 5.71 5.75 6.79 6.78 6.71
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 7.9 7.1 5.3 4.4 6.7 7.3 6.7 7.0 7.0 6.1 5.2 4.9 4.5
Nominal GDP (lcl bn) 3,258 3,507 3,832 4,015 3,922 3,954 4,023 4,042 4,077 4,261 4,500 4,701 4,916
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
Stock of bank credit (lcl, bn) 1,103 1,322 1,695 1,947 1,955 2,013 2,127 2,180 2,262 2,332 2,425 2,570 na
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
Gross domestic saving (% of GDP) 28.2 27.9 27.8 29.2 24.2 23.5 24.9 24.7 24.2 25.9 28.0 27.5 27.3
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
Fiscal balance (% of GDP)
Consolidated government balance -3.1 -2.3 -0.7 -2.1 -5.5 -4.4 -2.7 -3.9 -1.2 -2.0 -1.8 -1.1 -1.0
Total public debt (% of GDP) 28.0 27.9 27.8 28.7 34.1 38.2 39.9 44.6 45.1 42.6 40.6 40.0 39.4
External indicators
Exports ($bn) 78.1 95.0 122.8 147.2 113.2 132.3 161.7 155.4 160.3 171.8 na na na
Imports ($bn) 76.5 93.3 118.5 142.2 105.2 125.9 151.3 140.9 143.7 151.7 na na na
Trade balance ($bn) 1.6 1.7 4.3 5.0 7.9 6.4 10.4 14.5 16.6 20.1 na na na
Trade balance (% of GDP) 1.2 1.1 2.3 2.1 3.8 3.1 4.6 7.0 8.0 9.8 na na na
Current account balance ($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 ($bn) 11.6 4.0 9.0 2.3 2.0 4.9 2.6 6.2 -0.4 6.6 na na na
Net FDI (% of GDP) 8.6 2.6 4.8 1.0 0.9 2.4 1.1 3.0 -0.2 3.2 na na na
C/A balance plus FDI (% of GDP) 7.6 0.4 0.4 -0.9 -1.4 -1.3 -1.0 1.4 -0.7 3.8 na na na
Exports (% YoY, value) 16.4 21.6 29.2 20.0 -23.1 16.9 22.2 -3.9 3.2 7.2 na na na
Imports (% YoY, value) 12.2 22.0 26.9 20.1 -26.0 19.6 20.2 -6.9 2.0 5.5 na na na
FX reserves (ex gold, US$bn) 29.3 31.2 34.5 36.7 41.2 41.9 39.7 44.3 55.8 54.1 na na na
Import cover (months of imports) 4.6 4.0 3.5 3.1 4.7 4.0 3.1 3.8 4.7 4.3 na na na
Currency and monetary policy
Key policy rate (% YE) 1.0 1.5 2.5 1.3 0.3 0.3 0.3 0.1 0.1 0.1 na na na
Broad money growth (%YoY) 11.0 13.0 16.1 13.6 0.2 1.9 2.8 4.8 5.8 5.9 na na na
Exchange rate (EUR) annual average 29.8 28.4 27.8 25.1 26.5 25.3 24.6 25.2 26.0 27.6 27.4 27.7 28.2
Exchange rate ($) annual average 24.0 22.6 20.3 17.0 19.1 19.1 17.7 19.6 19.6 20.8 24.7 24.7 25.0
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
179
Egypt 654
Figure 654: Egypt key economic indicators
Ratings (M/S&P/F) B3/B-/B
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.5 6.8 7.1 7.2 4.7 5.1 1.8 2.2 2.1 2.2 4.2 4.3 4.5
Investment (% GDP) 18.0 18.7 20.9 22.4 19.2 19.5 17.1 16.4 14.2 14.0 14.8 15.3 15.2
Unemployment rate year-end (%) 11.5 10.9 9.2 8.7 9.4 9.2 10.4 12.4 13.0 13.4 12.9 12.4 11.7
Nominal GDP (lcl bn) 539 618 745 896 1,042 1,207 1,371 1,576 1,753 1,998 2,310 2,625 3,026
Nominal GDP ($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 ($) 1,265 1,487 1,770 2,159 2,452 2,779 2,930 3,183 3,205 3,304 3,555 3,592 3,781
Stock of bank credit (lcl, bn) 349 383 431 467 471 504 521 560 599 682 846 1,091 na
Lending/GDP (%) 64.8 62.0 57.8 52.1 45.2 41.8 38.0 35.5 34.1 34.1 36.6 41.6 na
Gross domestic saving (% of GDP) 21.2 20.4 22.9 22.9 16.8 17.5 14.5 12.5 11.8 13.2 11.3 10.8 10.8
Prices
CPI (average % YoY) 8.8 4.2 11.0 11.7 16.2 11.7 11.1 8.7 6.9 10.1 11.0 8.8 10.3
CPI (year-end, % YoY) 4.7 7.3 8.6 19.9 9.9 10.6 11.8 7.3 9.8 8.2 11.4 10.4 10.4
Fiscal balance (% of GDP)
Consolidated government balance -8.4 -9.2 -7.5 -8.0 -6.9 -8.3 -9.8 -10.5 -14.1 -13.6 -11.7 -9.4 -7.4
Total public debt (% of GDP) 103.3 90.3 80.2 70.2 73.0 73.2 76.6 78.9 89.0 90.5 90.0 89.3 84.8
External indicators
Exports ($bn) 10.6 13.6 16.0 26.1 24.1 27.3 31.5 29.2 28.9 26.7 na na na
Imports ($bn) 19.7 20.3 26.7 52.4 44.7 52.8 62.2 67.5 65.2 68.2 na na na
Trade balance ($bn) -9.1 -6.8 -10.7 -26.3 -20.6 -25.6 -30.6 -38.3 -36.3 -41.5 na na na
Trade balance (% of GDP) -10.2 -6.3 -8.2 -16.2 -10.9 -11.7 -13.0 -14.6 -13.4 -14.5 na na na
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
Exports (% YoY, value) 37.7 28.2 17.8 63.3 -7.7 13.2 15.7 -7.3 -1.2 -7.6 na na na
Imports (% YoY, value) 53.1 3.4 31.3 96.3 -14.8 18.3 17.7 8.6 -3.5 4.7 na na na
FX reserves (ex gold, US$bn) 20.6 24.5 30.2 32.2 32.3 33.6 14.9 11.6 13.6 12.0 na na na
Import cover (months of imports) 12.6 14.4 13.6 7.4 8.7 7.6 2.9 2.1 2.5 2.1 na na na
Currency and monetary policy
Key policy rate (% YE) 10.0 9.0 9.0 11.5 8.5 8.5 9.5 9.5 8.8 9.8 na na na
Broad money growth (%YoY) 11.5 15.0 19.1 10.5 9.5 12.4 6.7 12.3 18.9 15.8 na na na
Exchange rate (EGP/€) end-Jun 6.93 7.36 7.71 8.36 7.82 7.14 8.66 7.67 9.13 9.72 8.51 8.99 9.81
Exchange rate (EUR) annual average 7.49 7.22 7.83 8.11 7.70 7.32 8.10 7.72 8.58 9.27 8.18 9.05 9.83
Exchange rate (EGP/US$) 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
Exchange rate ($) annual average 6.02 5.75 5.71 5.51 5.53 5.52 5.82 6.01 6.46 6.97 7.35 8.10 8.70
Note: 2016-17E average annual exchange rate forecasts are IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
180
Estonia 655
Figure 655: Estonia key economic indicators
Ratings (M/S&P/F) A1/AA-/A+
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 9.4 10.3 7.7 -5.4 -14.7 2.5 7.6 5.2 1.6 2.9 2.0 2.9 3.0
Investment (% GDP) 33.2 39.3 39.3 30.7 20.7 21.3 25.1 28.1 27.6 28.0 25.6 25.7 26.0
Unemployment rate year-end (%) 8.0 5.9 4.6 5.5 13.5 16.7 12.3 10.0 8.6 7.4 6.8 6.5 5.5
Nominal GDP (lcl bn) 11.3 13.5 16.2 16.5 14.1 14.7 16.7 18.0 19.0 20.0 20.6 21.7 22.9
Nominal GDP ($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 ($) 10,404 12,630 16,591 18,110 14,710 14,584 17,307 17,897 19,638 20,096 17,427 18,449 19,762
Stock of bank credit (lcl, bn) 7.8 11.1 14.7 15.6 14.9 14.1 13.5 13.9 14.2 14.9 15.8 16.7 na
Lending/GDP (%) 69.2 82.0 90.3 94.8 105.1 95.8 81.1 77.0 74.8 74.6 76.6 77.2 na
Gross domestic saving (% of GDP) 24.7 24.8 24.5 22.5 23.1 23.1 26.4 27.7 27.5 27.4 26.1 26.1 26.1
Prices
CPI (average % YoY) 4.1 4.4 6.7 10.6 0.2 2.7 5.1 4.2 3.2 0.5 0.2 1.6 2.0
CPI (year-end, % YoY) 3.6 5.1 9.7 7.5 -1.9 5.4 4.1 3.6 2.0 0.0 0.4 2.1 2.0
Fiscal balance (% of GDP)
Consolidated government balance 1.6 2.4 2.4 -2.9 -1.9 0.2 1.0 -0.3 -0.5 0.6 -0.7 -0.5 -0.5
Total public debt (% of GDP) 4.5 4.4 3.7 4.5 7.0 6.5 5.9 9.5 9.9 10.4 10.8 10.8 10.6
External indicators
Exports ($bn) 7.7 9.7 11.0 12.5 9.1 10.7 15.4 15.2 15.8 15.5 na na na
Imports ($bn) 10.2 13.5 15.7 16.1 10.1 11.6 16.0 16.9 17.9 17.6 na na na
Trade balance ($bn) -2.5 -3.8 -4.7 -3.6 -1.1 -1.0 -0.6 -1.7 -2.1 -2.1 na na na
Trade balance (% of GDP) -17.9 -22.2 -21.0 -14.8 -5.5 -5.0 -2.7 -7.3 -8.2 -7.9 na na na
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
Net FDI (% of GDP) 16.1 4.0 4.4 2.5 1.7 7.5 7.8 1.3 0.7 2.9 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
Exports (% YoY, value) 30.3 26.1 13.6 13.2 -27.3 17.6 44.5 -1.1 3.8 -1.7 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
FX reserves (ex gold, US$bn) 1.9 2.8 3.3 4.0 4.0 2.6 0.2 0.3 0.3 0.4 na na na
Import cover (months of imports) 2.3 2.5 2.5 3.0 4.7 2.6 0.1 0.2 0.2 0.3 na na na
Currency and monetary policy
Key policy rate (% YE) 2.3 3.5 4.0 2.5 1.0 1.0 1.0 0.8 0.3 0.1 na na na
Broad money growth (%YoY) 7.3 10.1 11.6 7.7 -0.3 1.1 1.6 3.5 1.0 3.7 na na na
Exchange rate (EUR) annual average 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Exchange rate ($) annual average 1.25 1.26 1.37 1.47 1.39 1.33 1.39 1.29 1.33 1.33 1.11 1.12 1.13
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Source: IMF, UNCTAD, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
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 (lcl bn) 11.6 13.8 17.0 19.1 18.0 20.7 24.3 26.1 26.8 29.0 30.8 33.9 37.1
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
Fiscal balance (% of GDP)
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$) annual average 1.8 1.8 1.4 1.5 1.7 1.8 1.7 1.7 1.7 1.8 2.3 2.4 2.3
Source: IMF, UNCTAD, National Bank of Georgia, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
182
Ghana 657
Figure 657: Ghana key economic indicators
Ratings (M/S&P/F) B3/B-/B
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (%YoY) 6.0 6.1 6.5 8.4 3.5 7.9 14.0 9.3 7.3 4.0 3.4 5.0 6.5
Private consumption (%YoY) na na 5.1 10.8 -2.0 9.6 12.9 -6.7 7.7 4.3 1.5 4.5 5.0
Government consumption (%YoY) na na 1.5 13.0 20.0 14.0 49.8 12.9 -4.3 4.5 -3.0 4.0 5.0
Investment (%YoY) na na 18.3 30.1 -21.4 24.4 37.6 27.5 -4.7 5.5 4.0 4.2 4.5
Industry, value added (%YoY) na na 6.1 15.1 4.5 6.9 41.6 7.0 6.6 3.1 3.0 4.1 4.3
Nominal GDP (GHSbn) 15.8 18.7 23.2 30.2 36.6 46.0 59.8 75.0 93.4 113.3 134.1 154.5 183.2
Nominal GDP (€bn) 13.9 16.2 18.2 19.0 18.4 24.3 27.7 31.5 33.6 28.0 31.6 29.7 30.3
Nominal GDP (US$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
Interest & exchange rates
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/$) annual average 0.9 0.9 0.9 1.1 1.4 1.4 1.6 1.9 2.1 3.1 3.8 4.9 5.5
Source: IMF, UNCTAD, Bank of Ghana, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
183
Greece 658
Figure 658: Greece key economic indicators
Ratings (M/S&P/F) Caa3/CCC+/CCC
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 0.9 5.8 3.5 -0.4 -4.4 -5.4 -8.9 -6.6 -3.9 0.8 -2.3 -1.3 2.7
Investment (% GDP) 20.9 25.3 26.6 24.7 18.3 16.9 15.8 14.0 11.8 10.6 9.0 8.3 9.4
Unemployment rate year-end (%) 10.0 9.0 8.4 7.8 9.6 12.7 17.9 24.4 27.5 26.5 26.8 27.1 25.7
Nominal GDP (lcl bn) 199.2 217.8 232.8 242.1 237.4 226.2 207.8 194.2 182.4 179.1 173.5 172.2 178.1
Nominal GDP ($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 ($) 22,403 24,615 28,637 31,863 29,550 26,838 25,988 22,446 21,902 21,647 17,658 17,703 18,608
Stock of bank credit (lcl, bn) 162.2 186.1 218.4 238.2 226.5 269.0 259.8 239.1 227.8 222.7 218.3 224.8 na
Lending/GDP (%) 81.4 85.5 93.8 98.4 95.4 118.9 125.1 123.1 124.9 124.4 125.8 130.6 na
Gross domestic saving (% of GDP) 13.5 14.5 12.6 10.2 7.4 6.8 5.9 11.5 12.3 11.5 9.7 9.8 10.5
Prices
CPI (average % YoY) 3.5 3.2 2.9 4.2 1.2 4.7 3.3 1.5 -1.2 -1.5 -0.4 0.0 0.2
CPI (year-end, % YoY) 3.6 2.9 3.9 2.0 2.6 5.2 2.4 0.8 -1.7 -2.6 1.5 0.6 7.0
Fiscal balance (% of GDP)
Consolidated government balance -5.5 -6.1 -6.7 -9.9 -15.3 -11.1 -10.2 -6.4 -2.9 -3.9 -4.2 -3.6 -2.4
Total public debt (% of GDP) 98.1 102.9 102.8 108.8 126.2 145.7 171.0 156.5 175.0 177.1 197.0 206.6 203.6
External indicators
Exports ($bn) 18.5 21.7 26.7 31.4 24.7 27.5 33.2 34.6 35.8 35.2 na na na
Imports ($bn) 57.8 66.4 82.5 95.7 72.7 66.6 66.9 62.7 61.6 62.9 na na na
Trade balance ($bn) -39.2 -44.7 -55.9 -64.3 -48.0 -39.1 -33.7 -28.1 -25.8 -27.7 na na na
Trade balance (% of GDP) -15.8 -16.3 -17.5 -18.0 -14.5 -13.0 -11.7 -11.2 -10.7 -11.7 na na na
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
FX reserves (ex gold, US$bn) 0.5 0.6 0.6 0.3 1.6 1.3 1.2 1.3 1.4 1.9 na na na
Import cover (months of imports) 0.1 0.1 0.1 0.0 0.3 0.2 0.2 0.2 0.3 0.4 na na na
Currency and monetary policy
Key policy rate (% YE) 2.3 3.5 4.0 2.5 1.0 1.0 1.0 0.8 0.3 0.1 na na na
Broad money growth (%YoY) 7.3 10.1 11.6 7.7 -0.3 1.1 1.6 3.5 1.0 3.7 na na na
Exchange rate (EUR) annual average 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Exchange rate ($) annual average 1.25 1.26 1.37 1.47 1.39 1.33 1.39 1.29 1.33 1.33 1.11 1.12 1.13
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 7.2 7.5 7.5 7.9 10.1 11.3 11.1 11.1 10.2 7.8 7.3 7.0 6.8
Nominal GDP (lcl bn) 22,331 24,035 25,447 26,949 26,175 26,946 28,035 28,549 29,846 31,864 33,706 35,481 37,278
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
Stock of bank credit (lcl, bn) 11,284 13,164 15,636 18,528 17,810 18,401 18,307 15,918 15,148 15,002 15,753 16,540 na
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
Gross domestic saving (% of GDP) 18.3 18.6 17.0 17.6 19.5 20.9 21.2 21.0 23.9 25.8 26.5 26.8 26.4
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
Fiscal balance (% of GDP)
Consolidated government balance -7.9 -9.4 -5.1 -3.7 -4.6 -4.5 -5.5 -2.3 -2.5 -2.6 -2.7 -2.3 -2.2
Total public debt (% of GDP) 60.8 64.9 65.8 71.9 78.1 80.9 81.0 78.5 77.3 77.0 75.3 74.2 73.1
External indicators
Exports ($bn) 62.8 75.4 95.6 108.3 83.2 93.9 109.5 100.3 104.6 107.9 na na na
Imports ($bn) 66.4 78.4 95.7 109.2 77.9 87.6 100.9 93.6 98.2 103.1 na na na
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 ($bn) 5.4 0.5 2.5 1.4 0.8 3.8 1.9 2.8 -0.1 0.5 na na na
Net FDI (% of GDP) 4.8 0.4 1.8 0.9 0.6 3.0 1.3 2.2 -0.1 0.4 na na na
C/A balance plus FDI (% of GDP) -2.2 -6.7 -5.3 -6.2 -0.2 3.2 2.1 4.0 4.0 4.4 na na na
Exports (% YoY, value) 14.6 20.0 26.8 13.4 -23.2 12.9 16.6 -8.5 4.4 3.1 na na na
Imports (% YoY, value) 11.7 18.0 22.1 14.1 -28.7 12.4 15.3 -7.3 4.9 5.0 na na na
FX reserves (ex gold, US$bn) 18.6 21.5 24.0 33.8 44.1 44.8 48.7 44.5 46.4 41.9 na na na
Import cover (months of imports) 3.4 3.3 3.0 3.7 6.8 6.1 5.8 5.7 5.7 4.9 na na na
Currency and monetary policy
Key policy rate (% YE) 6.0 8.0 7.5 10.0 6.3 5.8 7.0 5.8 3.0 2.1 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 ($) annual average 200 210 184 172 202 208 201 225 224 233 284 286 285
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
185
Indonesia 660
Figure 660: Indonesia key economic indicators
Ratings (M/S&P/F) Baa3/BB+/BBB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 5.7 5.5 6.3 7.4 4.7 6.4 6.2 6.0 5.6 5.0 4.7 5.1 5.5
Investment (% GDP) 28.6 29.0 28.7 33.0 31.2 32.9 33.0 35.1 34.0 34.7 34.0 34.5 35.0
Unemployment rate year-end (%) 11.2 10.3 9.1 8.4 7.9 7.1 6.6 6.1 6.3 6.1 5.8 5.6 5.5
Nominal GDP (lcl tn) 3,017 3,632 4,297 5,415 6,011 6,864 7,832 8,616 9,525 10,543 11,786 13,060 14,419
Nominal GDP ($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 ($) 1,404 1,765 2,064 2,418 2,465 3,178 3,689 3,745 3,667 3,524 3,416 3,384 3,625
Stock of bank credit (lcl, tn) 25.7 24.1 25.1 26.1 25.7 27.8 30.4 33.9 37.0 37.6 37.6 37.4 na
Lending/GDP (%) 776 875 1,081 1,413 1,544 1,910 2,382 2,917 3,527 3,962 4,437 4,881 na
Gross domestic saving (% of GDP) 23.6 25.8 24.4 33.0 33.0 33.6 33.2 32.4 30.9 31.7 31.7 32.3 33.0
Prices
CPI (average % YoY) 10.5 13.1 6.7 9.8 5.0 5.1 5.3 4.0 6.4 6.4 6.8 5.4 4.7
CPI (year-end, % YoY) 17.1 6.6 6.0 11.1 3.0 7.0 3.8 3.7 8.1 8.4 4.6 4.7 4.6
Fiscal balance (% of GDP)
Consolidated government balance 0.4 0.4 -0.9 0.1 -1.6 -1.2 -0.6 -1.6 -2.0 -2.1 -2.3 -2.3 -2.2
Total public debt (% of GDP) 42.6 35.8 32.3 30.3 26.5 24.5 23.1 23.0 24.9 25.0 26.5 26.7 26.9
External indicators
Exports ($bn) 85.7 100.8 114.1 137.0 116.5 157.8 203.5 190.0 182.6 176.3 na na na
Imports ($bn) 57.7 61.1 74.5 129.2 96.8 135.7 177.4 191.7 186.6 178.2 na na na
Trade balance ($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
Net FDI (% of GDP) 1.7 0.6 0.5 0.6 0.5 1.5 1.3 1.5 1.3 1.8 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
Exports (% YoY, value) 19.7 17.7 13.2 20.1 -15.0 35.4 29.0 -6.6 -3.9 -3.4 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
FX reserves (ex gold, US$bn) 33.1 41.1 55.0 49.6 63.6 92.9 106.5 108.8 96.4 108.8 na na na
Import cover (months of imports) 6.9 8.1 8.9 4.6 7.9 8.2 7.2 6.8 6.2 7.3 na na na
Currency and monetary policy
Key policy rate (% YE) 12.8 9.8 8.0 9.3 6.5 6.5 6.0 5.8 7.5 7.8 na na na
Broad money growth (%YoY) 16.3 14.9 19.3 14.9 13.0 15.4 16.4 15.0 12.8 11.9 na na na
Exchange rate (EUR) annual average 12,094 11,507 12,528 14,267 14,497 12,059 12,208 12,052 13,863 15,765 15,027 16,671 17,147
Exchange rate ($) 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
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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$bn) 2.5 2.1 1.7 1.8 2.9 3.5 4.0 3.2 2.9 1.5 na na na
Net FDI (% of GDP) 1.1 0.8 0.5 0.5 0.7 0.7 0.7 0.6 0.6 0.4 na na na
C/A balance plus FDI (% of GDP) 8.2 8.8 10.2 6.3 3.1 6.6 10.9 4.6 6.6 4.2 na na na
Exports (%YoY, value) 47.2 18.1 28.2 3.7 -12.8 27.7 29.3 -33.3 -4.3 -7.1 -18.5 34.8 na
Imports (%YoY, value) 11.9 15.2 16.5 20.5 -1.3 9.0 3.4 -11.9 -11.0 6.4 -10.9 37.9 na
FX (ex gold, US$bn) 43.9 59.0 82.9 79.6 78.0 78.9 95.5 84.8 81.5 84.6 na na na
Import cover (months of imports) 12.1 14.2 17.1 13.6 13.5 12.5 14.7 14.8 16.0 15.6 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
Interest & exchange rates
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/$) annual average 9,027 9,198 9,280 9,607 9,920 10,339 10,964 12,294 21,076 26,509 29,750 32,250 30,500
Source: IMF, CBI, Bloomberg, Renaissance Capital
Renaissance Capital 11 November 2015
Facing the spectre
187
Iraq 662
Figure 662: Iraq key economic indicators
Ratings (M/S&P/F) Caa1/B-/B-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 1.7 5.6 1.9 8.2 3.4 6.4 7.5 13.9 6.6 -2.1 0.0 7.1 8.1
Investment (% GDP) na na na na na na na na na na na na na
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl tn) 73.5 95.6 111.5 157.0 130.6 162.1 217.3 254.2 271.1 260.6 192.5 205.7 233.6
Nominal GDP ($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 ($) 1,829 2,321 3,091 4,472 3,702 4,474 5,849 6,693 6,957 6,520 4,694 4,891 5,416
Stock of bank credit (lcl, bn) 1.7 2.9 2.8 4.4 5.1 8.9 12.7 20.5 23.3 25.5 28.1 32.0 na
Lending/GDP (%) 2.3 3.0 2.6 2.8 3.9 5.5 5.8 8.0 8.6 9.8 14.6 15.6 na
Gross domestic saving (% of GDP) 34.4 28.0 22.9 38.0 15.3 25.1 34.1 28.8 28.3 23.3 16.2 15.8 24.5
Prices
CPI (average % YoY) 37.0 53.2 30.8 2.7 -2.2 2.4 5.6 6.1 1.9 2.2 1.9 3.0 3.0
CPI (year-end, % YoY) 31.6 64.8 4.7 6.8 -4.4 3.3 6.0 3.6 3.1 1.6 3.0 3.0 3.0
Fiscal balance (% of GDP)
Consolidated government balance 4.1 10.7 7.8 -0.9 -12.7 -4.2 4.7 4.1 -5.8 -5.3 -23.1 -17.7 -9.9
Total public debt (% of GDP) 227.3 143.2 117.1 74.2 87.4 53.6 40.8 34.7 31.9 38.9 75.7 88.2 87.6
External indicators
Exports ($bn) 17.6 27.5 35.3 56.9 36.3 46.7 70.8 84.4 82.6 79.5 na na na
Imports ($bn) 12.8 13.3 15.3 21.9 25.7 29.5 37.1 45.8 52.0 50.3 na na na
Trade balance ($bn) 4.8 14.2 20.0 35.0 10.6 17.2 33.8 38.6 30.5 29.2 na na na
Trade balance (% of GDP) 9.6 21.8 22.5 26.6 9.5 12.4 18.2 17.7 13.1 13.1 na na na
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
FX reserves (ex gold, US$bn) 12.1 19.9 31.3 49.9 44.1 50.4 60.7 68.7 76.1 62.9 na na na
Import cover (months of imports) 11.3 18.0 24.6 27.3 20.6 20.5 19.7 18.0 17.6 15.0 na na na
Currency and monetary policy
Key policy rate (% YE) 7.0 16.0 20.0 15.0 7.0 6.0 6.0 6.0 6.0 6.0 na na na
Broad money growth (%YoY) 3.7 33.8 37.1 35.2 26.7 31.2 20.7 4.1 15.9 3.6 na na na
Exchange rate (EUR) annual average 848 856 1,092 1,234 1,190 1,134 1,189 1,103 1,139 1,140 954 959 969
Exchange rate ($) annual average 681 682 797 838 855 855 855 858 858 858 858 858 858
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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 (lcl bn) 8.9 10.7 12.1 15.6 16.9 18.8 20.5 22.0 23.9 25.4 27.1 29.0 31.1
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
Stock of bank credit (lcl, bn) 7.9 9.8 11.1 12.6 12.8 13.7 15.1 16.0 17.3 18.1 19.0 20.0 na
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
Gross domestic saving (% of GDP) 16.1 16.9 13.5 20.5 21.1 18.4 13.0 6.5 10.5 14.4 13.0 15.1 16.0
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
Fiscal balance (% of GDP)
Consolidated government balance -6.2 -4.5 -5.0 -4.4 -8.9 -5.6 -6.8 -8.9 -11.5 -10.0 -3.0 -3.2 -3.3
Total public debt (% of GDP) 91.3 83.8 77.4 60.2 64.8 67.1 70.7 81.8 86.7 89.0 90.0 86.6 83.2
External indicators
Exports ($bn) 4.3 5.2 5.5 6.2 5.0 5.9 6.7 8.1 7.9 8.4 na na na
Imports ($bn) 10.5 11.5 13.5 17.0 14.2 15.6 18.9 20.8 22.0 22.7 na na na
Trade balance ($bn) -6.2 -6.3 -8.0 -10.8 -9.2 -9.6 -12.2 -12.7 -14.1 -14.3 na na na
Trade balance (% of GDP) -49.2 -42.1 -46.7 -49.0 -38.6 -36.4 -42.3 -41.0 -42.0 -40.0 na na na
Current account balance ($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
Current account balance (% of GDP) -18.0 -11.5 -16.8 -9.4 -5.2 -7.1 -10.3 -15.2 -10.3 -6.8 -7.4 -6.5 -6.2
Net FDI ($bn) 1.8 3.7 2.6 2.8 2.3 1.6 1.4 1.5 1.7 1.7 na na na
Net FDI (% of GDP) 14.5 24.5 15.0 12.8 9.8 6.1 5.0 4.8 5.1 4.7 na na na
C/A balance plus FDI (% of GDP) -3.6 13.0 -1.8 3.5 4.6 -1.0 -5.3 -10.4 -5.1 -2.2 na na na
Exports (% YoY, value) 21.8 21.0 6.3 12.8 -19.3 17.8 13.4 20.1 -2.2 5.9 na na na
Imports (% YoY, value) 28.6 10.0 17.2 25.6 -16.2 9.3 21.6 9.8 6.1 3.1 na na na
FX reserves (ex gold, US$bn) 5.3 6.7 7.5 8.6 11.7 13.1 11.5 8.1 13.2 15.3 na na na
Import cover (months of imports) 6.0 7.0 6.7 6.0 9.9 10.1 7.3 4.7 7.2 8.1 na na na
Currency and monetary policy
Key policy rate (% YE) 4.5 5.3 4.8 4.0 2.5 2.0 2.3 4.0 3.5 2.8 na na na
Broad money growth (%YoY) 17.0 14.1 10.6 17.3 9.3 11.5 8.1 3.4 9.7 6.9 na na na
Exchange rate (EUR) annual average 1.76 1.77 1.93 2.07 1.96 1.87 1.96 1.81 1.87 1.87 1.57 1.58 1.59
Exchange rate ($) annual average 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
189
Kazakhstan 664
Figure 664: Kazakhstan key economic indicators
Ratings (M/S&P/F) Baa2/BBB/BBB+
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (%YoY) 9.7 10.6 8.9 3.3 1.2 7.3 7.5 5.0 6.0 4.4 0.7 2.8 3.9
Private consumption (%YoY) 11.1 12.7 10.9 6.3 0.6 11.8 10.9 11.0 10.1 -3.3 -1.2 4.2 na
Government consumption (%YoY) 10.8 7.3 14.0 4.3 1.0 2.7 11.3 13.2 1.0 10.3 6.8 7.0 na
Investment (%YoY) 34.7 20.3 17.3 1.0 -0.8 3.8 3.9 9.1 9.9 0.2 1.9 5.2 na
Industrial production (%YoY) 3.1 7.1 6.2 2.6 2.7 9.6 3.8 0.7 2.3 0.2 0.0 1.7 na
Unemployment rate year-end (%) 8.1 7.8 7.3 6.6 6.6 5.8 5.4 5.3 5.2 5.0 5.5 5.3 na
Nominal GDP (lcl bn) 7,591 10,214 12,850 16,053 17,008 21,816 27,571 30,347 35,275 39,041 41,476 46,049 51,146
Nominal GDP (€bn) 46.0 64.7 76.5 90.7 82.7 111.6 134.5 157.4 174.4 163.7 181.2 171.2 189.8
Nominal GDP (US$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$) 3,771 5,292 6,772 8,514 7,165 9,070 11,357 12,119 12,933 12,507 11,159 10,088 11,470
Gross domestic saving (% of GDP) 28.3 30.9 28.2 31.7 27.0 27.4 28.6 25.9 24.3 26.6 27.7 25.4 na
Stock of bank credit (lcl, bn) 38.9 54.7 69.0 57.5 56.7 41.6 37.9 38.4 39.8 40.3 46.9 51.6 na
Loan to deposit ratio % 156.8 152.4 186.6 137.9 118.1 102.7 104.7 110.7 111.9 103.0 105.0 106.0 na
Prices
CPI (average %YoY) 7.5 8.6 10.7 17.3 7.3 7.1 8.4 5.1 5.8 6.7 5.5 8.0 6.9
CPI (end-year %YoY) 7.6 8.4 18.8 9.5 6.2 7.8 7.4 6.0 4.8 7.4 7.1 7.7 6.5
PPI (average %YoY) 23.7 18.8 12.1 38.4 -20.1 27.0 27.3 3.8 -0.3 9.6 -17.5 19.2 na
Wage rates (%YoY, nominal) 20.2 21.0 28.2 16.4 10.9 14.7 15.8 13.9 6.8 10.6 10.1 12.4 na
Fiscal balance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 na
Consolidated government balance 0.6 0.8 -1.7 -2.1 -3.1 -2.5 -2.1 -2.9 -2.1 -2.2 -2.5 -2.2 na
Total public debt (% of GDP) 10.3 12.0 7.7 9.8 16.5 17.5 12.4 12.7 13.2 14.2 14.7 14.8 na
External balance
Exports (US$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$bn) 15.1 33.2 38.6 47.4 47.5 59.3 73.0 86.2 95.5 102.5 93.0 90.0 na
Import cover (months of imports) 10.1 18.7 14.1 14.8 19.7 21.6 21.7 21.1 23.1 28.3 36.0 40.4 na
Debt indicators
Gross external debt (US$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
Gross external debt (% of GDP) 76.1 91.4 92.4 80.9 97.9 79.8 66.6 67.3 67.5 72.1 75.9 84.7 na
Gross external debt (% of exports) 153.5 212.6 202.5 150.0 257.0 192.6 147.0 157.7 178.3 198.5 324.7 315.5 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
Total debt service (% of GDP) 19.4 14.5 24.3 23.9 26.4 14.3 12.0 10.9 11.2 11.8 12.7 14.4 na
Total debt service (% of exports) 39.1 33.8 53.2 44.2 69.4 34.4 26.4 25.4 29.5 32.4 54.1 53.6 na
Interest & exchange rates
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$) annual average 133 126 123 120 148 147 147 149 152 179 210 255 245
Source: IMF, UNCTAD, National Bank of Kazakhstan, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
190
Kenya 665
Figure 665: Kenya key economic indicators
Ratings (M/S&P/F) B1/B+/B+
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (%YoY) 5.7 5.9 6.9 0.2 3.3 8.4 6.1 4.5 5.7 5.5 5.2 5.5 6.0
Private consumption (%YoY) na na 5.3 -1.6 4.7 7.6 6.3 5.7 8.3 7.6 6.1 6.2 6.8
Government consumption (%YoY) na na 8.1 8.6 8.7 3.6 4.1 7.3 1.1 8.2 7.9 7.5 7.2
Investment (%YoY) 18.2 18.6 2.2 12.9 10.0 14.1 4.5 12.7 1.4 6.5 8.1 8.0 8.0
Industry, value added (%YoY) 4.4 5.0 7.1 4.7 2.8 5.4 2.8 4.5 6.4 6.8 7.0 6.9 6.9
Nominal GDP (KESbn) 1,587 1,862 2,151 2,483 2,864 3,169 3,726 4,255 4,731 5,358 6,088 6,915 7,865
Nominal GDP (€bn) 16.9 20.6 23.3 24.4 26.6 30.2 30.1 39.2 41.4 46.3 54.6 57.5 60.9
Nominal GDP (US$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$) 622 744 896 978 983 1,040 1,062 1,237 1,315 1,418 1,384 1,361 1,436
Gross national saving (% of GDP) 15.5 15.7 15.1 12.7 14.4 12.4 9.4 9.6 12.2 11.0 14.1 14.5 16.3
Loans to non-banking sector (lcl bn) 417 475 541 686 758 915 1,191 1,360 1,580 2,035 2,341 2,786 3,343
Lending/GDP (%) 26.3 25.5 25.1 27.6 26.5 28.9 32.0 32.0 33.4 38.0 38.4 40.3 42.5
Loan to deposit ratio 80.1 76.0 71.8 73.3 75.3 74.0 80.0 77.3 74.0 76.0 77.0 79.0 79.0
Prices
CPI (average %YoY) 9.9 6.0 4.3 16.2 9.4 3.8 13.6 9.6 5.7 7.0 6.6 7.5 7.5
CPI (end-year %YoY) 4.7 7.3 5.6 17.8 5.3 4.5 18.6 3.2 7.1 6.0 7.5 8.1 7.0
Fiscal balance (% of GDP)*
General government budget balance -2.3 -2.5 -3.2 -4.2 -4.9 -4.8 -5.8 -6.4 -7.7 -8.6 -7.9 -6.4 -5.5
General government primary balance 0.0 -0.5 -0.8 -1.8 -2.7 -2.5 -2.2 -2.9 -3.3 -4.5 -5.4 -5.3 -4.4
Total public debt 52.0 44.2 43.1 44.4 45.1 47.5 44.8 43.2 46.0 49.1 56.2 57.5 59.0
External balance
Exports (US$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
Current account balance (US$bn) -0.3 -0.5 -1.1 -2.0 -1.6 -2.5 -4.5 -4.3 -3.7 -5.4 -4.6 -4.5 -4.4
Current account balance (% of GDP) -1.3 -2.0 -3.4 -5.6 -4.4 -6.3 -10.6 -8.5 -6.7 -8.9 -7.6 -7.3 -6.6
Net FDI (US$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
FX reserves (ex gold, US$bn) 1.8 2.4 3.4 2.9 3.8 4.0 4.0 5.4 6.2 6.9 6.9 6.5 6.5
Import cover (months of imports) 3.9 4.3 4.8 3.2 4.9 4.0 3.2 3.9 4.5 4.6 5.1 4.6 4.4
Debt indicators
Gross external debt (US$bn) 6.5 6.7 7.5 7.6 8.6 8.8 10.3 15.9 17.8 25.6 30.9 34.0 38.0
Gross external debt (% of GDP) 30.8 25.8 23.5 21.2 23.2 22.0 24.5 31.6 32.5 42.0 50.6 55.3 57.0
Gross external debt (% of exports) 187 190 182 151 191 171 179 260 305 426 546 554 603
Total debt service (US$bn) 0.5 0.4 0.5 0.4 0.4 0.4 0.4 0.9 1.1 1.7 1.9 2.3 2.5
Total debt service (% of GDP) 2.6 1.7 1.4 1.1 1.0 1.0 1.0 1.7 1.9 2.8 3.2 3.7 3.8
Total debt service (% of exports) 15.6 12.2 11.0 8.2 8.6 5.0 5.0 13.9 17.9 28.3 34.3 36.9 40.1
Interest & exchange rates
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
Broad money supply (%YoY) 10.2 17.9 20.9 13.0 16.0 21.7 19.1 14.9 14.7 16.9 14.0 17.0 19.0
Credit to the private sector (%YoY) 7.0 14.6 16.4 27.2 19.5 21.3 30.1 11.1 16.2 28.8 15.0 19.0 20.0
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/$) annual average 75.5 72.1 67.3 69.2 77.2 79.2 88.8 84.5 86.1 88.0 99.8 112 118
Source: IMF, UNCTAD, Central Bank of Kenya, Bloomberg, Renaissance Capital estimates
Source: IMF, UNCTAD, National Bank of Kazakhstan, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
191
Kuwait 666
Figure 666: Kuwait key economic indicators
Ratings (M/S&P/F) Aa2/AA/AA
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 10.1 7.5 6.0 2.5 -7.1 -2.4 10.6 7.7 0.8 0.1 1.2 2.5 2.7
Investment (% GDP) 16.4 16.2 20.5 17.6 18.0 17.7 13.5 12.8 14.1 15.1 20.8 21.0 20.5
Unemployment rate year-end (%) 1.3 1.4 1.7 1.7 1.6 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1
Nominal GDP (lcl bn) 23.6 29.5 32.6 39.6 30.5 33.1 42.5 48.7 49.9 49.1 36.1 37.6 41.5
Nominal GDP ($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 ($) 27,017 31,907 33,729 42,825 30,414 32,217 41,829 45,988 45,203 43,163 29,982 30,423 32,652
Stock of bank credit (lcl, bn) 12.1 16.1 21.8 25.5 27.0 27.5 28.2 29.0 31.1 31.2 30.8 31.2 na
Lending/GDP (%) 51.4 54.8 67.0 64.2 88.6 83.2 66.4 59.6 62.4 63.4 85.5 82.8 na
Gross domestic saving (% of GDP) 56.8 64.7 57.2 58.5 42.3 50.8 57.1 58.7 56.6 46.3 30.2 28.1 29.4
Prices
CPI (average % YoY) 4.1 3.1 5.5 6.3 4.6 4.5 4.9 3.2 2.7 2.9 3.3 3.3 3.5
CPI (year-end, % YoY) 4.5 3.6 7.5 9.0 2.1 6.0 3.1 4.4 2.7 2.9 3.3 3.3 3.5
Fiscal balance (% of GDP)
Consolidated government balance 43.3 31.9 37.4 20.2 27.2 25.9 33.0 34.7 34.0 26.3 1.3 0.1 2.5
Total public debt (% of GDP) 14.1 10.6 11.8 9.6 11.0 11.3 8.5 6.8 6.4 6.9 9.9 9.8 9.2
External indicators
Exports ($bn) 35.8 47.0 54.4 78.9 47.7 61.8 86.6 103.3 98.7 91.6 na na na
Imports ($bn) 15.2 16.6 21.4 25.9 19.4 23.2 25.5 26.3 29.0 31.6 na na na
Trade balance ($bn) 20.6 30.5 33.0 53.1 28.3 38.5 61.1 77.0 69.7 60.0 na na na
Trade balance (% of GDP) 25.5 30.0 28.8 36.0 26.7 33.4 39.7 44.3 39.6 34.7 na na na
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
C/A balance plus FDI (% of GDP) 31.1 36.7 28.4 34.7 19.6 27.8 37.8 32.8 32.6 23.7 na na na
Exports (% YoY, value) 40.6 31.3 15.7 45.1 -39.6 29.5 40.2 19.3 -4.5 -7.2 na na na
Imports (% YoY, value) 18.8 8.7 28.9 21.0 -24.9 19.7 9.8 2.9 10.5 9.0 na na na
FX reserves (ex gold, US$bn) 8.9 12.6 16.7 17.1 20.3 21.2 25.8 28.9 29.4 32.1 na na na
Import cover (months of imports) 7.0 9.1 9.4 7.9 12.5 11.0 12.1 13.2 12.1 12.2 na na na
Currency and monetary policy
Key policy rate (% YE) 6.0 6.3 6.3 3.8 3.0 2.5 2.5 2.0 2.0 2.0 na na na
Broad money growth (%YoY) 12.0 21.7 19.1 15.8 13.4 3.0 8.2 6.5 9.8 3.7 na na na
Exchange rate (EUR) annual average 0.36 0.36 0.39 0.40 0.40 0.38 0.38 0.36 0.38 0.38 0.33 0.33 0.33
Exchange rate ($) annual average 0.29 0.29 0.28 0.27 0.29 0.29 0.28 0.28 0.28 0.28 0.29 0.29 0.29
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
192
Lebanon 667
Figure 667: Lebanon 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) 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
Investment (% GDP) na na na na na na na na na na na na na
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 32,089 32,859 37,050 43,465 52,974 57,300 60,414 66,481 71,755 75,417 82,000 85,970 89,562
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
Stock of bank credit (lcl, bn) 22,578 23,841 27,736 33,482 38,447 47,829 54,164 59,690 65,949 71,217 76,202 81,536 na
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
Fiscal balance (% of GDP)
Consolidated government balance -8.7 -10.7 -11.0 -10.0 -8.2 -7.6 -5.9 -8.4 -8.7 -6.0 -10.0 -8.0 -8.8
Total public debt (% of GDP) 180.7 185.2 171.0 163.1 145.6 138.4 133.9 130.8 133.4 133.1 132.4 134.3 137.7
External indicators
Exports ($bn) 1.8 2.2 2.7 3.4 3.4 3.9 4.2 4.5 3.7 3.3 na na na
Imports ($bn) 9.3 9.4 11.8 16.1 16.2 18.0 20.1 21.3 21.6 20.5 na na na
Trade balance ($bn) -7.5 -7.2 -9.1 -12.7 -12.8 -14.1 -15.8 -16.8 -17.9 -17.2 na na na
Trade balance (% of GDP) -35.3 -32.9 -36.9 -44.1 -36.4 -37.1 -39.5 -38.1 -37.5 -34.3 na na na
Current account balance ($bn) -2.9 -1.6 -1.8 -3.2 -4.4 -7.9 -6.1 -10.7 -12.7 -12.4 -11.4 -11.0 -10.9
Current account balance (% of GDP) -13.7 -7.3 -7.2 -11.1 -12.5 -20.7 -15.1 -24.3 -26.7 -24.9 -21.0 -19.3 -18.3
Net FDI ($bn) 1.9 1.8 2.5 3.3 3.7 3.8 2.7 3.0 0.9 1.2 na na na
Net FDI (% of GDP) 9.0 8.3 10.3 11.6 10.5 10.0 6.8 6.7 1.9 2.4 na na na
C/A balance plus FDI (% of GDP) -4.8 1.0 3.0 0.5 -2.1 -10.7 -8.3 -17.6 -24.8 -22.5 na na na
Exports (% YoY, value) 7.3 22.4 23.3 24.8 0.2 12.4 8.9 6.7 -17.6 -10.4 na na na
Imports (% YoY, value) -0.6 0.6 25.7 36.6 0.5 10.7 11.6 6.1 1.3 -4.9 na na na
FX reserves (ex gold, US$bn) 11.9 13.4 12.9 20.2 29.1 31.5 33.7 37.2 36.7 39.5 na na na
Import cover (months of imports) 15.3 17.1 13.1 15.1 21.5 21.1 20.2 21.0 20.5 23.2 na na na
Currency and monetary policy
Key policy rate (% YE) 12.0 12.0 12.0 12.0 10.0 10.0 10.0 10.0 10.0 10.0 na na na
Broad money growth (%YoY) 4.0 8.7 13.3 14.2 19.8 12.0 5.1 6.7 7.4 6.2 na na na
Exchange rate (EUR) annual average 1,878 1,893 2,066 2,219 2,100 2,000 2,098 1,938 2,002 2,003 1,677 1,685 1,704
Exchange rate ($) annual average 1,508 1,508 1,508 1,507 1,508 1,507 1,507 1,508 1,508 1,507 1,507 1,508 1,507
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
193
Lithuania 668
Figure 668: Lithuania key economic indicators
Ratings (M/S&P/F) A3/A-/A-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 7.8 7.4 11.1 2.6 -14.8 1.6 6.1 3.8 3.3 3.0 1.8 2.6 3.0
Investment (% GDP) 24.2 26.9 32.3 28.1 12.6 18.1 21.9 19.2 19.1 18.9 21.1 21.8 22.4
Unemployment rate year-end (%) 8.3 5.8 4.2 5.8 13.8 17.8 15.4 13.4 11.8 10.7 10.6 10.0 10.0
Nominal GDP (lcl bn) 21 24 29 33 27 28 31 33 35 36 38 40 43
Nominal GDP ($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 ($) 7,879 9,246 12,314 15,104 11,866 12,001 14,374 14,338 15,692 16,469 14,317 15,368 16,632
Stock of bank credit (lcl, bn) 9 12 17 20 19 18 16 18 17 17 18 19 na
Lending/GDP (%) 40.7 49.9 59.1 62.0 69.1 62.6 52.8 53.8 48.8 46.8 47.5 46.9 na
Gross domestic saving (% of GDP) 17.1 16.5 17.4 15.2 14.7 17.8 18.0 18.0 20.7 19.0 18.9 19.5 20.2
Prices
CPI (average % YoY) 2.7 3.8 5.8 11.1 4.2 1.2 4.1 3.2 1.2 0.2 -0.4 1.6 1.7
CPI (year-end, % YoY) 3.0 4.5 8.2 8.5 1.2 3.6 3.5 2.9 0.5 -0.2 0.2 1.5 1.9
Fiscal balance (% of GDP)
Consolidated government balance -0.5 -0.4 -1.0 -3.3 -9.3 -6.9 -9.0 -3.2 -2.6 -0.7 -1.2 -1.4 -1.4
Total public debt (% of GDP) 18.3 18.0 16.7 15.4 29.0 36.3 37.3 39.8 38.8 40.9 38.8 38.5 37.9
External indicators
Exports ($bn) 11.8 14.2 17.2 23.7 16.5 20.7 28.0 29.6 32.6 32.4 na na na
Imports ($bn) 15.5 19.4 24.5 31.3 18.3 23.2 31.5 31.7 34.6 35.0 na na na
Trade balance ($bn) -3.7 -5.3 -7.3 -7.5 -1.8 -2.4 -3.5 -2.1 -2.0 -2.6 na na na
Trade balance (% of GDP) -14.2 -17.4 -18.3 -15.6 -4.9 -6.6 -7.9 -5.0 -4.3 -5.4 na na na
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
Exports (% YoY, value) 26.5 20.3 21.3 38.3 -30.5 25.6 35.4 5.6 10.1 -0.7 na na na
Imports (% YoY, value) 25.1 25.3 26.0 27.9 -41.3 26.3 36.0 0.8 9.0 1.1 na na na
FX reserves (ex gold, US$bn) 3.7 5.7 7.6 6.3 6.4 6.3 7.9 8.2 7.8 8.5 na na na
Import cover (months of imports) 2.9 3.5 3.7 2.4 4.2 3.3 3.0 3.1 2.7 2.9 na na na
Currency and monetary policy
Key policy rate (% YE) 2.3 3.5 4.0 2.5 1.0 1.0 1.0 0.8 0.3 0.1 na na na
Broad money growth (%YoY) 7.3 10.1 11.6 7.7 -0.3 1.1 1.6 3.5 1.0 3.7 na na na
Exchange rate (EUR) annual average 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Exchange rate ($) annual average 1.25 1.26 1.37 1.48 1.39 1.33 1.39 1.29 1.33 1.33 1.11 1.12 1.13
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 9.6 9.1 8.5 7.2 7.3 7.8 7.9 8.0 8.0 7.8 7.8 7.6 7.6
Nominal GDP (lcl bn) 191.4 213.4 244.0 274.3 282.4 299.2 323.0 343.8 366.2 386.1 405.3 433.3 462.2
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
Stock of bank credit (lcl, bn) 153.4 171.8 196.7 249.1 251.3 279.0 311.1 364.3 413.4 402.0 418.1 451.6 na
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
Gross domestic saving (% of GDP) 18.3 18.0 22.1 18.3 15.0 14.3 13.1 18.4 19.8 18.3 20.3 20.8 20.2
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
Fiscal balance (% of GDP)
Consolidated government balance -4.7 -4.4 -3.3 -2.8 -3.6 -3.2 -3.2 -1.8 -3.5 -3.2 -5.0 -3.9 -3.8
Total public debt (% of GDP) 53.5 51.0 47.3 44.0 52.1 51.9 52.1 51.5 53.9 56.2 56.0 54.3 52.8
External indicators
Exports ($bn) 2.0 2.1 2.0 2.1 1.8 2.0 2.2 2.3 2.3 2.6 na na na
Imports ($bn) 3.2 3.6 3.9 4.6 3.7 4.4 5.1 5.4 5.2 5.4 na na na
Trade balance ($bn) -1.2 -1.5 -1.9 -2.6 -1.9 -2.4 -3.0 -3.1 -2.9 -2.8 na na na
Trade balance (% of GDP) -18.5 -24.4 -22.5 -30.1 -20.1 -24.2 -27.0 -27.5 -24.3 -22.4 na na na
Current account balance ($bn) -0.3 -0.6 -0.5 -0.9 -0.7 -1.0 -1.5 -0.8 -0.8 -0.7 -0.6 -0.6 -0.7
Current account balance (% of GDP) -5.0 -9.1 -5.4 -10.1 -7.4 -10.3 -13.8 -7.3 -6.3 -5.6 -4.8 -4.8 -5.3
Net FDI ($bn) 0.0 0.1 0.3 0.3 0.2 13.8 -1.0 5.7 1.2 0.5 na na na
Net FDI (% of GDP) -0.1 1.6 3.3 3.8 2.3 141.3 -9.0 50.5 10.1 4.2 na na na
C/A balance plus FDI (% of GDP) -5.1 -7.5 -2.1 -6.3 -5.1 131.0 -22.8 43.3 3.8 -1.3 na na na
Exports (% YoY, value) 4.5 5.4 -6.5 5.1 -15.1 14.5 7.9 4.2 0.4 13.2 na na na
Imports (% YoY, value) 14.0 15.1 6.2 20.2 -20.3 18.5 17.4 4.0 -3.3 4.2 na na na
FX reserves (ex gold, US$bn) 1.3 1.3 1.8 1.7 2.2 2.4 2.6 2.8 3.3 3.6 na na na
Import cover (months of imports) 5.1 4.2 5.5 4.5 7.1 6.7 6.0 6.4 7.7 8.0 na na na
Currency and monetary policy
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
Broad money growth (%YoY) 6.6 9.5 15.3 14.6 2.4 6.9 6.4 8.2 5.8 8.7 na na na
Exchange rate (EUR) annual average 24.6 27.2 21.2 21.8 21.0 23.0 21.0 23.8 23.1 23.1 31.5 31.9 31.7
Exchange rate ($) annual average 30.6 34.1 29.0 32.1 29.3 30.5 29.3 30.6 30.7 30.7 35.0 35.7 35.8
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
195
Morocco 670
Figure 670: Morocco key economic indicators
Ratings (M/S&P/F) Ba1/BBB-/BBB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 3.3 7.6 3.5 5.9 4.2 3.8 5.2 3.0 4.7 2.4 4.9 3.7 4.8
Investment (% GDP) 27.5 28.1 33.9 39.1 35.0 34.1 35.8 35.0 34.7 33.7 33.4 34.3 35.1
Unemployment rate year-end (%) 11.1 9.7 9.8 9.6 9.1 9.1 8.9 9.0 9.2 9.9 9.8 9.7 9.6
Nominal GDP (lcl bn) 553 604 648 717 748 785 820 848 901 925 999 1,052 1,115
Nominal GDP ($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 ($) 2,066 2,250 2,563 2,967 2,948 2,927 3,149 3,022 3,264 3,316 3,077 3,249 3,442
Stock of bank credit (lcl, bn) 296 359 462 577 644 715 790 830 859 896 950 1,007 na
Lending/GDP (%) 53.5 59.4 71.4 80.5 86.1 91.2 96.3 97.9 95.3 96.9 95.1 95.7 na
Gross domestic saving (% of GDP) 27.3 26.6 31.4 31.9 29.7 29.7 27.9 25.5 26.8 28.2 31.1 32.6 33.6
Prices
CPI (average % YoY) 1.0 3.3 2.0 3.9 1.0 1.0 0.9 1.3 1.9 0.4 1.5 2.0 2.0
CPI (year-end, % YoY) 2.1 3.3 2.0 4.2 -1.6 2.2 0.9 2.6 0.4 1.6 1.6 2.0 2.0
Fiscal balance (% of GDP)
Consolidated government balance -5.9 -1.9 -0.1 0.7 -1.8 -4.3 -6.6 -7.3 -5.2 -4.9 -4.3 -3.5 -3.0
Total public debt (% of GDP) 61.6 56.8 52.0 45.4 46.1 49.0 52.5 58.3 61.5 63.4 63.9 63.9 63.2
External indicators
Exports ($bn) 10.8 12.3 14.5 18.9 13.5 16.6 20.8 19.5 21.8 23.6 na na na
Imports ($bn) 20.5 23.3 31.2 40.6 32.4 35.1 43.6 42.9 44.7 45.6 na na na
Trade balance ($bn) -9.6 -11.0 -16.8 -21.7 -18.9 -18.5 -22.8 -23.4 -23.0 -22.0 na na na
Trade balance (% of GDP) -15.5 -16.0 -21.2 -23.5 -20.4 -19.9 -22.5 -23.8 -21.4 -20.0 na na na
Current account balance ($bn) -0.1 -1.1 -2.0 -6.6 -4.9 -4.1 -8.0 -9.3 -8.5 -6.0 -2.4 -1.8 -1.7
Current account balance (% of GDP) -0.2 -1.5 -2.5 -7.1 -5.3 -4.4 -7.9 -9.5 -7.9 -5.5 -2.3 -1.6 -1.5
Net FDI ($bn) 1.6 2.0 2.2 2.2 1.5 0.7 2.3 2.5 2.9 3.1 na na na
Net FDI (% of GDP) 2.6 2.9 2.8 2.3 1.6 0.7 2.2 2.5 2.7 2.9 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
Exports (% YoY, value) 9.4 13.3 17.7 30.8 -28.8 23.4 25.2 -6.2 11.5 8.5 na na na
Imports (% YoY, value) 15.1 13.5 34.2 30.1 -20.3 8.5 24.2 -1.7 4.3 1.9 na na na
FX reserves (ex gold, US$bn) 16.2 20.3 24.1 22.1 22.8 22.6 19.5 16.4 18.4 19.6 na na na
Import cover (months of imports) 9.5 10.5 9.3 6.5 8.4 7.7 5.4 4.6 4.9 5.1 na na na
Currency and monetary policy
Key policy rate (% YE) 3.3 3.3 3.3 3.5 3.3 3.3 3.3 3.0 3.0 2.8 na na na
Broad money growth (%YoY) 14.1 18.1 17.5 13.3 7.0 4.2 6.4 4.5 3.1 6.6 na na na
Exchange rate (EUR) annual average 11.0 11.0 11.2 11.4 11.2 11.2 11.3 11.1 11.2 11.2 10.8 10.7 10.7
Exchange rate ($) annual average 8.9 8.8 8.2 7.8 8.1 8.4 8.1 8.6 8.4 8.4 9.7 9.6 9.5
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Gross national saving (% of GDP) 36.3 34.2 30.6 25.3 26.8 21.2 19.2 19.3 18.7 16.0 15.6 15.4 16.3
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
Loan to deposit ratio 58.0 60.5 70.9 94.7 100.8 86.7 79.3 73.3 69.1 72.1 71.0 72.0 73.0
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
Fiscal balance (% of GDP)
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
Total public debt 20.0 8.1 8.5 7.5 9.6 9.6 10.2 10.4 10.4 10.5 11.9 13.7 15.4
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
Current account balance (% of GDP) 6.2 17.3 11.2 9.2 5.3 3.7 2.1 4.4 4.1 1.1 -2.9 -2.7 -2.1
Net FDI (US$bn) 5.0 8.8 6.0 5.5 5.8 4.0 7.7 4.2 3.0 2.9 2.5 2.7 2.7
Net FDI (% of GDP) 3.1 4.1 2.4 1.7 2.2 1.1 1.9 0.9 0.6 0.5 0.5 0.6 0.5
C/A balance plus FDI (% of GDP) 9.3 21.4 13.6 11.0 7.5 4.7 4.0 5.3 4.7 1.7 -2.4 -2.1 -1.5
Exports (% YoY, value) 43.3 18.0 -6.8 47.3 -25.7 25.2 24.2 3.0 -1.0 -11.8 -46.9 8.7 15.1
Imports (% YoY, value) -10.8 70.0 43.6 -15.1 8.1 79.3 15.5 -13.8 -4.1 11.2 -30.8 5.0 11.6
FX reserves (ex gold, US$bn) 28.3 42.3 51.3 53.0 44.8 32.3 32.4 44.2 43.6 34.5 28.0 32.1 34.0
Import cover (months of imports) 25.3 22.3 18.9 22.9 17.9 7.2 6.3 9.9 10.2 7.2 8.5 9.3 8.8
Debt indicators
Gross external debt (US$bn) 20.5 4.1 3.9 4.1 4.5 5.6 5.9 6.5 8.9 11.5 13.4 16.0 17.5
Gross external debt (% of GDP) 12.9 1.9 1.5 1.3 1.7 1.5 1.4 1.4 1.7 2.1 2.7 3.4 3.3
Gross external debt (% of exports) 41.1 6.9 7.0 5.1 7.6 7.5 6.3 6.8 9.3 13.7 30.2 33.0 31.4
Total debt service (US$bn) 8.8 6.7 1.0 0.4 0.4 0.3 0.4 0.3 0.5 0.5 0.4 0.5 0.6
Total debt service (% of GDP) 5.6 3.1 0.4 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Total debt service (% of exports) 17.7 11.4 1.8 0.5 0.7 0.4 0.4 0.3 0.5 0.5 0.9 1.1 1.0
Interest & exchange rates
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
Broad money supply (%YoY) 7.7 50.7 58.1 58.0 17.1 7.1 15.8 12.0 14.7 16.0 18.2 19.0 20.0
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/$) annual average 133 129 126 119 150 151 156 157 159 165 200 236 239
Source: IMF, UNCTAD, Central Bank of Nigeria, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
197
Oman 672
Figure 672: Oman key economic indicators
Ratings (M/S&P/F) A1/A-/NR
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 2.5 5.4 4.5 8.2 6.1 4.8 4.1 5.8 4.7 2.9 4.4 2.8 2.0
Investment (% GDP) 22.1 28.0 35.2 37.5 29.2 26.2 19.1 25.3 28.0 28.4 29.5 29.9 30.5
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 11.6 13.9 15.7 22.8 18.0 21.9 26.0 29.0 29.6 29.9 23.1 23.3 25.1
Nominal GDP ($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 ($) 11,524 13,536 14,954 21,275 16,203 19,697 22,621 22,921 21,425 20,925 15,672 15,323 15,973
Stock of bank credit (lcl, bn) 3.8 4.6 6.4 9.2 9.7 11.0 12.8 14.8 15.8 17.6 18.3 18.7 na
Lending/GDP (%) 32.5 33.1 41.0 40.3 54.2 50.3 49.1 50.9 53.5 58.9 79.1 80.1 na
Gross domestic saving (% of GDP) 39.2 43.6 41.2 46.0 28.1 35.1 32.3 35.6 34.6 30.4 12.6 5.6 8.1
Prices
CPI (average % YoY) 1.9 3.2 5.9 12.6 3.5 3.3 4.0 2.9 1.2 1.0 0.4 2.0 2.9
CPI (year-end, % YoY) 1.9 4.3 8.3 11.8 0.9 4.2 3.3 2.9 0.3 1.0 0.4 2.0 2.9
Fiscal balance (% of GDP)
Consolidated government balance 13.2 14.4 12.4 17.3 -0.3 5.7 9.4 4.7 3.2 -1.5 -17.7 -20.0 -18.5
Total public debt (% of GDP) 9.9 8.9 7.1 4.8 6.9 5.9 5.2 4.9 5.1 5.1 9.3 12.2 14.1
External indicators
Exports ($bn) 18.7 21.6 24.7 37.7 27.7 36.6 47.1 52.1 56.4 53.2 na na na
Imports ($bn) 8.8 10.9 16.0 22.9 17.9 19.8 23.6 28.1 34.3 29.3 na na na
Trade balance ($bn) 9.9 10.7 8.7 14.8 9.8 16.8 23.5 24.0 22.1 23.9 na na na
Trade balance (% of GDP) 32.7 29.6 21.4 25.0 21.0 29.6 34.7 31.8 28.7 30.7 na na na
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
C/A balance plus FDI (% of GDP) 21.5 19.3 14.3 12.5 1.9 8.4 12.7 10.6 7.0 2.0 na na na
Exports (% YoY, value) 39.7 15.5 14.4 52.8 -26.7 32.3 28.7 10.7 8.2 -5.7 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
FX reserves (ex gold, US$bn) 4.4 5.0 9.5 11.6 12.2 13.0 14.4 14.4 16.0 16.3 na na na
Import cover (months of imports) 5.9 5.5 7.2 6.1 8.2 7.9 7.3 6.1 5.6 6.7 na na na
Currency and monetary policy
Key policy rate (% YE) na na na na na na na na na na na na na
Broad money growth (%YoY) na na na 23.3 4.7 11.3 12.2 10.7 8.5 12.0 na na na
Exchange rate (EUR) annual average 0.48 0.48 0.53 0.57 0.54 0.51 0.53 0.49 0.51 0.51 0.43 0.43 0.43
Exchange rate ($) annual average 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
198
Pakistan 673
Figure 673: Pakistan 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) 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
Unemployment rate year-end (%) 7.7 6.2 5.3 5.2 5.5 5.6 6.0 6.5 6.2 6.7 6.5 6.0 5.5
Nominal GDP (lcl bn) 6,500 8,216 9,240 10,638 13,200 14,867 18,276 20,047 22,379 25,068 27,384 30,170 33,402
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
Stock of bank credit (lcl, bn) 2,156 2,523 2,962 3,493 3,864 3,988 3,825 4,146 4,448 4,946 5,441 6,039 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
Gross domestic saving (% of GDP) 17.7 15.7 14.3 11.1 12.1 13.6 14.2 13.0 13.9 13.7 14.3 14.8 15.0
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
Fiscal balance (% of GDP)
Consolidated government balance -3.0 -3.4 -5.1 -7.1 -5.0 -6.0 -6.7 -8.6 -8.4 -4.9 -5.3 -4.2 -3.3
Total public debt (% of GDP) 63.5 54.4 52.6 57.9 59.1 61.5 59.5 64.0 64.8 64.9 64.7 64.4 62.8
External indicators
Exports ($bn) 16.0 16.5 18.8 21.7 17.5 21.2 25.4 25.2 26.2 26.8 na na na
Imports ($bn) 25.4 34.2 39.9 46.4 31.6 43.6 51.0 52.3 54.6 59.5 na na na
Trade balance ($bn) -9.4 -17.7 -21.1 -24.7 -14.1 -22.4 -25.7 -27.1 -28.4 -32.7 na na na
Trade balance (% of GDP) -8.5 -12.9 -13.8 -14.4 -8.3 -12.6 -12.0 -12.0 -12.3 -13.2 na na na
Current account balance ($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 ($bn) 2.2 4.2 5.5 5.4 2.3 2.0 1.2 0.8 1.1 1.7 na na na
Net FDI (% of GDP) 2.0 3.0 3.6 3.1 1.3 1.1 0.6 0.3 0.5 0.7 na na na
C/A balance plus FDI (% of GDP) 0.6 -0.6 -0.9 -5.0 -4.1 -1.1 0.7 -1.7 -0.6 -0.6 na na na
Exports (% YoY, value) 20.8 2.9 14.2 15.2 -19.3 20.9 19.7 -0.8 4.1 2.4 na na na
Imports (% YoY, value) 43.1 34.6 16.7 16.4 -31.8 37.8 17.1 2.4 4.5 9.0 na na na
FX reserves (ex gold, US$bn) 10.0 11.5 14.0 7.2 11.3 14.3 14.5 10.2 5.2 11.8 na na na
Import cover (months of imports) 4.7 4.1 4.2 1.9 4.3 3.9 3.4 2.4 1.1 2.4 na na na
Currency and monetary policy
Key policy rate (% YE) 9.0 9.5 10.0 15.0 12.5 14.0 12.0 9.5 10.0 9.5 na na na
Broad money growth (%YoY) na na 17.4 6.5 17.6 14.6 12.6 17.2 13.3 11.6 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
Source: IMF, UNCTAD, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 11.4 8.0 7.3 7.4 7.5 7.3 7.0 7.0 7.1 6.8 6.3 6.0 5.9
Nominal GDP (lcl bn) 5,678 6,271 6,893 7,721 8,026 9,003 9,708 10,561 11,542 12,643 13,529 14,860 16,376
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
Stock of bank credit (lcl, bn) 1,960 2,259 2,539 2,766 2,928 3,304 3,885 4,423 5,038 5,921 6,750 7,695 na
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
Gross domestic saving (% of GDP) 23.5 23.7 22.7 19.4 21.6 24.1 23.0 21.0 24.2 25.4 25.7 25.8 25.9
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 59.2 51.6 44.6 44.2 44.3 43.5 41.4 40.6 39.2 36.4 35.9 33.9 32.0
External indicators
Exports ($bn) 41.2 47.0 50.5 49.1 39.2 51.4 48.0 52.0 54.0 61.8 na na na
Imports ($bn) 47.4 51.5 55.5 60.4 45.9 60.2 66.2 67.9 68.0 71.0 na na na
Trade balance ($bn) -6.2 -4.5 -5.0 -11.3 -6.7 -8.8 -18.1 -15.9 -14.0 -9.2 na na na
Trade balance (% of GDP) -6.0 -3.7 -3.4 -6.5 -3.9 -4.4 -8.1 -6.4 -5.2 -3.2 na na na
Current account balance ($bn) 2.0 7.0 8.1 0.1 8.4 7.2 5.6 6.9 11.4 12.6 14.9 14.9 14.6
Current account balance (% of GDP) 1.9 5.7 5.4 0.1 5.0 3.6 2.5 2.8 4.2 4.4 5.0 4.5 4.0
Net FDI ($bn) 0.9 1.6 -2.5 -0.6 0.2 -1.6 -0.3 -1.0 0.1 -0.8 na na na
Net FDI (% of GDP) 0.8 1.3 -1.6 -0.4 0.1 -0.8 -0.2 -0.4 0.0 -0.3 na na na
C/A balance plus FDI (% of GDP) 2.8 7.0 3.8 -0.3 5.1 2.8 2.4 2.4 4.2 4.2 na na na
Exports (% YoY, value) 3.9 14.0 7.4 -2.8 -20.1 31.1 -6.6 8.2 3.8 14.5 na na na
Imports (% YoY, value) 7.7 8.7 7.7 8.8 -24.1 31.2 9.9 2.6 0.2 4.4 na na na
FX reserves (ex gold, US$bn) 15.9 20.0 30.2 33.2 38.8 55.4 67.3 73.5 75.7 72.1 na na na
Import cover (months of imports) 4.0 4.7 6.5 6.6 10.1 11.0 12.2 13.0 13.4 12.2 na na na
Currency and monetary policy
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
Broad money growth (%YoY) na na 9.6 10.0 8.6 10.9 5.3 7.0 29.3 12.4 na na na
Exchange rate (EUR) annual average 68.6 64.4 63.3 65.5 66.3 59.9 60.3 54.3 56.4 59.0 50.3 50.3 50.5
Exchange rate ($) annual average 55.1 51.3 46.1 44.5 47.6 45.1 43.3 42.2 42.4 44.4 45.2 45.0 44.7
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
200
Poland 675
Figure 675: Poland key economic indicators
Ratings (M/S&P/F) A2/A-/A-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 3.5 6.2 7.2 3.9 2.6 3.7 4.8 1.8 1.7 3.4 3.5 3.5 3.6
Investment (% GDP) 19.6 21.5 24.8 24.3 20.2 21.0 22.2 20.6 19.1 20.2 20.1 20.7 21.3
Unemployment rate year-end (%) 17.7 13.8 9.6 7.1 8.2 9.6 9.6 10.1 10.3 9.0 7.5 7.2 7.2
Nominal GDP (lcl bn) 985 1,065 1,187 1,277 1,362 1,437 1,554 1,616 1,663 1,729 1,790 1,881 1,978
Nominal GDP ($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 ($) 7,975 8,996 11,256 13,906 11,454 12,533 13,769 13,049 13,825 14,411 12,662 13,390 14,217
Stock of bank credit (lcl, bn) 285 353 464 633 678 735 838 858 896 968 1,036 1,119 na
Lending/GDP (%) 28.9 33.1 39.1 49.6 49.8 51.2 53.9 53.1 53.9 56.0 57.9 59.5 na
Gross domestic saving (% of GDP) 17.1 17.6 18.5 17.7 16.3 15.5 17.2 17.2 17.8 18.9 19.6 19.8 19.5
Prices
CPI (average % YoY) 2.1 1.0 2.5 4.2 3.5 2.6 4.3 3.7 0.9 0.0 -0.8 1.0 2.0
CPI (year-end, % YoY) 0.7 1.4 4.0 3.3 3.5 3.1 4.6 2.4 0.7 -1.0 0.1 1.6 2.2
Fiscal balance (% of GDP)
Consolidated government balance -4.0 -4.0 -2.1 -3.6 -7.2 -7.6 -4.9 -3.7 -4.0 -3.2 -2.8 -2.5 -2.6
Total public debt (% of GDP) 47.0 47.5 44.6 47.0 50.3 53.6 54.8 54.4 55.7 50.1 51.1 51.0 51.1
External indicators
Exports ($bn) 89.3 110.9 140.4 171.1 136.8 154.8 182.3 179.5 196.9 208.8 na na na
Imports ($bn) 101.4 127.2 166.1 209.4 149.7 170.7 202.6 190.2 197.7 210.9 na na na
Trade balance ($bn) -12.2 -16.3 -25.7 -38.3 -12.9 -15.9 -20.3 -10.6 -0.7 -2.1 na na na
Trade balance (% of GDP) -4.0 -4.8 -6.0 -7.2 -3.0 -3.3 -3.9 -2.1 -0.1 -0.4 na na na
Current account balance ($bn) -7.7 -13.6 -26.9 -34.8 -17.3 -26.3 -26.2 -17.0 -6.9 -6.9 -2.5 -5.0 -9.8
Current account balance (% of GDP) -2.5 -4.0 -6.3 -6.6 -4.0 -5.5 -5.0 -3.4 -1.3 -1.3 -0.5 -1.0 -1.8
Net FDI ($bn) 6.9 10.7 18.0 10.4 8.5 9.3 14.0 6.6 3.7 8.7 na na na
Net FDI (% of GDP) 2.3 3.1 4.2 2.0 1.9 1.9 2.7 1.3 0.7 1.6 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
Exports (% YoY, value) 21.0 24.2 26.6 21.8 -20.0 13.1 17.8 -1.5 9.7 6.0 na na na
Imports (% YoY, value) 15.0 25.4 30.6 26.0 -28.5 14.0 18.7 -6.2 4.0 6.7 na na na
FX reserves (ex gold, US$bn) 40.9 46.4 63.0 59.3 75.9 88.8 92.6 103.4 102.2 96.5 na na na
Import cover (months of imports) 4.8 4.4 4.5 3.4 6.1 6.2 5.5 6.5 6.2 5.5 na na na
Currency and monetary policy
Key policy rate (% YE) 4.5 4.0 5.0 5.0 3.5 3.5 4.5 4.3 2.5 2.0 na na na
Broad money growth (%YoY) 15.0 16.0 13.4 18.6 8.1 8.8 12.5 4.5 6.2 8.2 na na na
Exchange rate (EUR) annual average 4.03 3.90 3.79 3.55 4.34 4.00 4.12 4.18 4.20 4.19 4.14 4.13 4.14
Exchange rate ($) annual average 3.24 3.10 2.77 2.41 3.12 3.02 2.96 3.25 3.16 3.16 3.72 3.70 3.66
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
201
Qatar 676
Figure 676: Qatar 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) 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
Investment (% GDP) na na na na na na na na na na na na na
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 162.1 221.6 290.2 419.6 356.0 455.4 618.1 692.7 734.9 764.8 699.2 699.7 772.1
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
Stock of bank credit (lcl, bn) 61.4 88.8 147.4 218.6 223.9 270.3 351.2 439.9 491.2 536.0 589.6 654.5 na
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
Gross domestic saving (% of GDP) 51.1 57.4 60.4 64.2 49.5 50.4 59.3 60.7 59.5 58.5 51.4 48.5 50.8
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 17.6 12.5 8.0 11.5 33.6 38.4 34.5 36.0 32.3 31.7 29.9 27.8 23.6
External indicators
Exports ($bn) 25.8 34.1 44.5 67.3 48.0 75.0 114.4 132.9 136.9 131.6 na na na
Imports ($bn) 10.1 16.4 23.4 27.8 24.9 23.2 22.3 25.1 26.8 30.4 na na na
Trade balance ($bn) 15.7 17.6 21.0 39.5 23.2 51.8 92.2 107.8 110.1 101.2 na na na
Trade balance (% of GDP) 35.3 28.9 26.4 34.3 23.7 41.4 54.3 56.6 54.5 48.2 na na na
Current account balance ($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 ($bn) na na na na na na -9.2 -1.4 -8.9 -5.7 na na na
Net FDI (% of GDP) na na na na na na -5.4 -0.8 -4.4 -2.7 na na na
C/A balance plus FDI (% of GDP) na na na na na na 25.3 31.8 26.5 23.4 na na na
Exports (% YoY, value) 37.9 32.2 30.6 51.4 -28.7 56.2 52.7 16.1 3.0 -3.9 na na na
Imports (% YoY, value) 67.6 63.4 42.5 18.8 -10.7 -6.8 -3.9 12.9 6.5 13.3 na na na
FX reserves (ex gold, US$bn) 4.5 5.4 9.4 9.6 18.4 30.6 16.2 32.5 41.6 42.7 na na na
Import cover (months of imports) 5.4 3.9 4.8 4.2 8.9 15.9 8.7 15.5 18.6 16.9 na na na
Currency and monetary policy
Key policy rate (% YE) 4.5 5.5 5.5 5.5 5.5 5.5 4.5 4.5 4.5 4.5 na na na
Broad money growth (%YoY) 42.9 39.6 39.5 19.7 16.9 23.1 17.1 22.9 19.6 10.6 na na na
Exchange rate (EUR) annual average 4.53 4.57 4.99 5.36 5.07 4.83 5.06 4.68 4.83 4.84 4.05 4.07 4.11
Exchange rate ($) annual average 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
202
Romania 677
Figure 677: Romania key economic indicators
Ratings (M/S&P/F) Baa3/BBB-/BBB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.2 8.1 6.9 8.5 -7.1 -0.8 1.1 0.6 3.4 2.8 3.4 3.9 3.4
Investment (% GDP) 23.9 27.2 31.3 33.4 27.1 26.8 27.9 27.0 24.5 23.0 24.2 24.2 24.1
Unemployment rate year-end (%) 7.2 7.1 6.3 5.6 6.2 7.0 7.1 6.8 7.1 6.8 6.9 6.8 6.7
Nominal GDP (lcl bn) 290.5 347.0 418.3 524.4 510.5 533.9 565.1 596.7 637.6 666.6 698.9 731.4 775.2
Nominal GDP ($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 ($) 4,692 5,811 8,125 10,160 8,221 8,277 9,214 8,561 9,570 9,981 8,807 9,251 9,951
Stock of bank credit (lcl, bn) 60.7 94.2 152.0 203.4 206.6 217.6 232.6 237.2 230.2 224.0 224.0 235.2 na
Lending/GDP (%) 20.9 27.1 36.3 38.8 40.5 40.8 41.2 39.8 36.1 33.6 32.1 32.2 na
Gross domestic saving (% of GDP) 15.2 16.9 17.8 22.0 22.6 22.3 23.2 22.5 23.7 22.6 23.5 22.7 22.1
Prices
CPI (average % YoY) 9.0 6.6 4.8 7.8 5.6 6.1 5.8 3.3 4.0 1.1 -0.4 -0.2 2.5
CPI (year-end, % YoY) 8.7 4.9 6.6 6.3 4.8 8.0 3.1 5.0 1.6 0.8 -0.5 1.1 2.5
Fiscal balance (% of GDP)
Consolidated government balance -0.7 -1.3 -3.1 -4.7 -7.1 -6.3 -4.2 -2.5 -2.5 -1.9 -1.8 -2.6 -3.0
Total public debt (% of GDP) 17.5 12.5 12.7 13.4 23.3 30.5 33.9 37.5 38.8 40.6 40.9 41.5 42.2
External indicators
Exports ($bn) 27.6 32.5 40.6 49.7 40.7 48.5 62.1 57.0 64.5 68.7 na na na
Imports ($bn) 40.4 51.3 70.6 84.3 54.5 61.7 76.1 69.7 73.1 77.4 na na na
Trade balance ($bn) -12.7 -18.9 -30.0 -34.6 -13.8 -13.1 -14.0 -12.8 -8.6 -8.7 na na na
Trade balance (% of GDP) -12.7 -15.3 -17.5 -16.5 -8.2 -7.8 -7.5 -7.4 -4.5 -4.4 na na na
Current account balance ($bn) -8.6 -12.8 -23.1 -24.1 -7.6 -7.7 -8.6 -7.8 -1.6 -0.9 -1.2 -2.8 -3.9
Current account balance (% of GDP) -8.6 -10.4 -13.5 -11.5 -4.5 -4.6 -4.6 -4.5 -0.8 -0.4 -0.7 -1.5 -2.0
Net FDI ($bn) 6.5 11.0 9.6 13.6 4.9 3.0 2.6 2.9 3.9 3.3 na na na
Net FDI (% of GDP) 6.5 8.9 5.6 6.5 2.9 1.8 1.4 1.7 2.0 1.7 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
Exports (% YoY, value) 17.8 17.5 24.9 22.5 -18.2 19.3 28.0 -8.2 13.2 6.4 na na na
Imports (% YoY, value) 23.9 27.2 37.5 19.5 -35.4 13.2 23.4 -8.3 4.8 5.9 na na na
FX reserves (ex gold, US$bn) 19.9 28.1 37.2 36.9 40.8 43.4 42.9 41.2 44.8 39.2 na na na
Import cover (months of imports) 5.9 6.6 6.3 5.2 9.0 8.4 6.8 7.1 7.4 6.1 na na na
Currency and monetary policy
Key policy rate (% YE) 7.5 8.8 7.5 10.3 8.0 6.3 6.0 5.3 4.0 2.8 na na na
Broad money growth (%YoY) 20.0 14.1 33.8 17.5 9.0 6.8 6.5 2.8 8.8 8.4 na na na
Exchange rate (EUR) annual average 3.61 3.53 3.34 3.68 4.23 4.22 4.22 4.46 4.42 4.45 4.45 4.46 4.45
Exchange rate ($) annual average 2.90 2.81 2.44 2.50 3.04 3.18 3.04 3.47 3.33 3.35 4.00 3.99 3.94
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, Bloomberg, BNR, Renaissance Capital
Renaissance Capital 11 November 2015
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
Stock of bank credit (lcl, bn) 5,540 8,183 12,506 16,861 16,454 18,616 23,954 28,657 33,700 37,744 37,933 39,640 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
Total public debt (% of GDP) 14.8 8.9 7.1 5.2 9.4 9.6 9.9 10.0 11.4 14.4 14.7 15.2 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
Current account balance (% of GDP) 11.1 9.6 6.0 6.2 4.0 4.6 5.2 3.6 1.6 3.2 5.6 5.2 5.0
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
Import cover (months of imports) 17.5 22.2 25.8 17.5 27.4 23.1 18.5 19.2 15.1 15.0 21.2 20.0 na
Debt indicators
Gross external debt year-end ($bn) 257 313 464 481 467 483 545 636 729 594 498 474 na
Gross external debt (% of GDP) 33.7 31.6 35.7 29.0 38.1 31.7 28.7 31.9 35.1 32.1 40.0 34.4 na
Gross external debt (% of exports) 105.3 103.0 131.1 101.9 154.0 120.7 104.4 111.1 139.3 120.3 138.0 123.8 na
Total debt service ($bn) 59 85 107 148 87 100 109 128 143 130 101 91 na
Total debt service (% of GDP) 7.7 8.6 8.2 8.9 7.1 6.6 5.7 6.4 6.9 7.0 8.1 6.6 na
Total debt service (% of exports) 24.1 28.0 30.2 31.4 28.7 25.1 20.9 24.2 27.3 26.3 28.1 23.8 na
Interest & exchange rates
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/$) annual average 28.3 27.2 25.6 24.9 31.7 30.4 29.4 31.0 31.9 38.6 60.7 58.7 57.4
Exchange rate (RUB/EUR) year-end 34.1 34.7 35.9 42.7 43.3 40.8 41.7 40.3 44.9 68.4 66.8 60.9 62.6
Exchange rate (RUB/EUR) annual average 35.2 34.1 35.0 36.5 44.1 40.3 40.9 39.9 42.4 50.9 66.2 61.9 63.1
Source: IMF, UNCTAD, Rosstat, CBR, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
204
Rwanda 679
Figure 679: Rwanda key economic indicators
Ratings (M/S&P/F) NR/B+/B+
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (%YoY) 9.4 9.2 7.6 11.2 6.2 6.3 7.5 8.9 4.7 6.9 6.5 7.0 7.5
Private consumption (%YoY) 9.3 9.2 -10.5 24.0 8.0 7.5 6.5 7.5 1.0 4.8 9.8 7.3 8.0
Government consumption (%YoY) 10.5 8.0 2.3 2.5 4.0 4.8 7.0 17.8 3.8 14.3 -7.5 7.9 8.5
Investment (%YoY) 16.6 9.2 27.8 31.5 5.3 7.5 9.8 22.5 8.5 8.5 7.2 7.4 7.2
Industry value added (%YoY) 9.8 10.8 9.5 15.0 1.8 8.3 17.8 8.3 9.8 5.8 8.5 9.0 9.0
Nominal GDP (Rwfbn) 1,440 1,716 2,065 2,623 3,017 3,323 3,846 4,437 4,864 5,389 5,968 6,699 7,545
Nominal GDP (€bn) 2.1 2.5 2.7 3.2 3.8 4.2 4.3 4.7 5.4 6.0 6.7 8.0 8.4
Nominal GDP (US$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$) 285.6 337.9 398.8 489.4 532.7 558.7 621.9 676.5 661.4 712.7 750.9 729.6 766.7
Gross national saving (% of GDP) 21.9 12.4 16.7 19.4 16.4 17.8 16.4 14.7 19.1 14.4 14.7 15.9 13.1
Stock of bank credit (lcl, bn) 162 208 254 335 349 391 502 670 758 906 1,124 1,405 1,742
Lending/GDP (%) 11.3 12.1 12.4 13.1 11.8 12.0 13.2 15.4 17.0 18.8 20.8 20.8 20.8
Loan to deposit ratio 83.2 78.8 71.4 88.5 91.0 86.0 87.0 94.0 88.0 87.0 88.0 90.0 90.0
Prices
Urban CPI (average %YoY) na na na na na 3.8 3.1 6.3 4.2 1.8 2.7 2.7 4.6
Urban CPI (end-year %YoY) na na na na na 4.5 7.1 3.9 3.6 2.1 3.9 3.1 4.5
Fiscal balance (% of GDP)
General govt. budget balance (incl. grants) 0.9 0.2 -1.8 0.9 0.3 0.4 -1.2 -5.0 -4.0 -5.1 -4.4 -3.9 -4.0
Total public debt 70.7 26.6 27.0 21.3 22.9 20.0 20.1 21.7 28.4 30.7 33.1 35.0 37.8
External balance
Exports (US$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$bn) 0.4 0.4 0.6 0.9 1.0 1.1 1.6 2.0 2.2 2.4 2.3 2.2 2.4
Trade balance (US$bn) -0.2 -0.3 -0.4 -0.6 -0.8 -0.8 -1.1 -1.4 -1.9 -2.1 -1.7 -1.5 -1.5
Trade balance (% of GDP) -8.9 -9.6 -10.8 -13.1 -14.5 -13.6 -17.4 -19.4 -26.5 -26.2 -20.1 -17.0 -16.5
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$bn) 0.3 0.4 0.5 0.6 0.6 0.7 0.9 0.7 0.9 0.9 0.8 1.0 1.0
Import cover (months imports) 11.1 11.0 10.7 8.1 7.6 7.7 7.2 4.4 5.1 4.3 4.0 5.3 0.0
Debt indicators
Gross external debt (US$bn) 1.5 0.5 0.6 0.7 0.8 0.8 1.0 1.5 2.0 2.2 2.6 2.9 3.4
Gross external debt (% of GDP) 58.5 15.6 15.3 14.4 14.4 14.1 16.2 21.1 27.4 27.9 30.2 33.4 36.9
Gross external debt (% of exports) 1209 330 324 253 319 244 222 253 550 666 472 407 367
Total debt service (US$bn) 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Total debt service (% of GDP) 2.4 3.6 0.4 0.3 0.3 0.3 0.3 0.5 0.8 0.8 0.9 1.1 1.2
Total debt service (% of exports) 50.5 76.4 8.2 5.4 6.3 5.9 3.7 6.1 16.6 18.3 14.2 13.2 11.7
Exchange rates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Key repo rate YE 12.5 12.5 12.5 11.3 6.0 6.0 7.0 7.5 7.0 6.5 6.5 6.0 6.0
Credit to the private sector (%YoY) 24.9 27.5 22.4 31.6 5.0 11.2 28.4 30.4 12.6 19.7 24.0 25.0 24.0
Exchange rate (RWF/EUR) year-end 655 724 794 780 819 796 783 833 932 835 847 857 942
Exchange rate (RWF/EUR) annual average 694 694 750 804 792 774 837 790 894 902 793 840 899
Exchange rate (RWF/$) year-end 554 549 544 559 571 594 604 631 676 690 770 801 841
Exchange rate (RWF/$) annual average 558 552 547 547 568 583 601 614 673 686 710 785 821
Source: IMF, UNCTAD, National Bank of Rwanda, Bloomberg, Renaissance Capital estimates
Source: IMF, UNCTAD, Rosstat, CBR, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
205
Saudi Arabia680
Figure 680: Saudi Arabia key economic indicators
Ratings (M/S&P/F) Aa3/AA-/AA
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 7.3 5.6 6.0 8.4 1.8 4.8 10.0 5.4 2.7 3.5 3.4 2.2 2.9
Investment (% GDP) 20.2 22.2 26.5 27.3 31.7 30.7 26.8 26.3 26.2 27.8 29.7 30.5 30.1
Unemployment rate year-end (%) 6.1 6.3 5.6 5.2 5.4 5.5 5.8 5.5 5.6 5.5 n/a n/a n/a
Nominal GDP (lcl bn) 1,231 1,411 1,559 1,949 1,609 1,976 2,511 2,752 2,791 2,798 2,370 2,412 2,604
Nominal GDP ($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 ($) 14,068 15,604 16,667 20,157 16,095 19,113 23,594 25,139 24,816 24,252 20,139 20,093 21,269
Stock of bank credit (lcl, bn) 436 476 578 735 734 776 858 1,003 1,126 1,256 1,357 1,465 na
Lending/GDP (%) 35.4 33.7 37.1 37.7 45.6 39.3 34.2 36.4 40.3 44.9 57.2 60.7 na
Gross domestic saving (% of GDP) 47.6 48.6 48.9 52.8 36.6 43.4 50.5 48.8 44.4 38.1 26.1 25.8 28.2
Prices
CPI (average % YoY) 0.5 1.9 5.0 6.1 4.1 3.8 3.7 2.9 3.5 2.7 2.1 2.3 2.9
CPI (year-end, % YoY) 1.1 2.8 6.0 9.5 4.0 5.8 2.7 3.6 3.0 2.4 2.1 2.3 2.9
Fiscal balance (% of GDP)
Consolidated government balance 18.0 20.8 11.8 29.8 -5.4 3.6 11.2 12.0 5.8 -3.4 -21.6 -19.4 -17.6
Total public debt (% of GDP) 37.3 25.8 17.1 12.1 14.0 8.4 5.4 3.6 2.2 1.6 6.7 17.3 25.8
External indicators
Exports ($bn) 154.4 195.4 208.7 303.5 172.4 230.5 329.1 364.7 348.6 332.5 na na na
Imports ($bn) 59.5 69.9 90.4 113.9 93.0 105.6 129.8 153.0 163.2 169.7 na na na
Trade balance ($bn) 94.9 125.5 118.4 189.6 79.5 124.9 199.3 211.6 185.5 162.8 na na na
Trade balance (% of GDP) 28.9 33.3 28.5 36.5 18.5 23.7 29.8 28.8 24.9 21.8 na na na
Current account balance ($bn) 90.1 99.1 93.4 132.3 21.0 66.8 158.6 164.8 135.4 76.9 -22.4 -30.3 -13.2
Current account balance (% of GDP) 27.4 26.3 22.5 25.5 4.9 12.7 23.7 22.4 18.2 10.3 -3.5 -4.7 -1.9
Net FDI ($bn) 12.5 18.4 24.5 36.0 34.3 25.3 12.9 7.8 3.9 2.6 na na na
Net FDI (% of GDP) 3.8 4.9 5.9 6.9 8.0 4.8 1.9 1.1 0.5 0.4 na na na
C/A balance plus FDI (% of GDP) 31.2 31.2 28.4 32.4 12.9 17.5 25.6 23.5 18.7 10.7 na na na
Exports (% YoY, value) 39.0 26.6 6.8 45.4 -43.2 33.6 42.8 10.8 -4.4 -4.6 na na na
Imports (% YoY, value) 33.0 17.4 29.3 26.1 -18.4 13.6 22.9 17.9 6.6 4.0 na na na
FX reserves (ex gold, US$bn) 155.0 226.0 305.5 442.2 409.7 444.7 540.7 656.5 725.3 731.9 na na na
Import cover (months of imports) 31.3 38.8 40.6 46.6 52.9 50.5 50.0 51.5 53.3 51.8 na na na
Currency and monetary policy
Key policy rate (% YE) 4.3 4.7 4.0 1.5 0.3 0.3 0.3 0.3 0.3 0.3 na na na
Broad money growth (%YoY) 14.8 19.3 19.6 17.6 10.7 5.0 13.3 13.9 10.9 11.9 na na na
Exchange rate (EUR) annual average 4.67 4.71 5.14 5.52 5.22 4.98 5.22 4.82 4.98 4.98 4.17 4.19 4.24
Exchange rate ($) annual average 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 21.8 21.6 18.8 14.4 16.9 20.0 23.6 24.6 23.0 19.7 20.6 21.8 22.2
Nominal GDP (lcl bn) 1,751 2,055 2,355 2,745 2,880 3,067 3,408 3,584 3,876 3,878 3,976 4,153 4,388
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
Gross domestic saving (% of GDP) 16.3 15.4 11.9 9.3 13.2 12.1 11.5 9.5 11.5 9.6 13.3 14.0 15.1
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 54.1 40.3 33.4 32.4 36.0 43.7 46.6 58.3 61.4 72.2 76.7 78.4 77.7
External indicators
Exports ($bn) 1.0 6.4 8.8 11.0 8.3 9.8 11.8 11.3 14.7 14.8 na na na
Imports ($bn) 2.6 13.2 18.6 22.9 16.1 16.7 19.9 18.9 20.6 20.5 na na na
Trade balance ($bn) -1.6 -6.7 -9.7 -11.9 -7.7 -6.9 -8.1 -7.5 -5.8 -5.6 na na na
Trade balance (% of GDP) -6.0 -21.9 -24.0 -24.2 -18.1 -17.8 -17.4 -18.5 -12.8 -12.9 na na na
Current account balance ($bn) -2.2 -3.0 -7.0 -10.3 -2.7 -2.5 -4.0 -4.7 -2.8 -2.6 -1.5 -1.5 -1.6
Current account balance (% of GDP) -8.4 -9.6 -17.2 -21.1 -6.2 -6.4 -8.6 -11.5 -6.1 -6.0 -4.0 -3.9 -3.9
Net FDI ($bn) na na 2.5 2.7 1.9 1.2 2.5 1.2 2.1 1.8 na na na
Net FDI (% of GDP) na na 6.1 5.5 4.4 3.0 5.4 3.0 4.5 4.1 na na na
C/A balance plus FDI (% of GDP) na na -11.1 -15.5 -1.8 -3.4 -3.1 -8.4 -1.6 -1.9 na na na
Exports (% YoY, value) na 516.6 37.3 24.3 -24.0 17.4 20.3 -3.7 29.7 0.6 na na na
Imports (% YoY, value) na 402.9 40.9 23.3 -29.8 4.2 18.6 -4.9 8.9 -0.5 na na na
FX reserves (ex gold, US$bn) 5.6 11.6 13.9 11.1 14.8 12.7 14.9 13.6 14.8 11.4 na na na
Import cover (months of imports) 25.8 10.6 9.0 5.8 11.0 9.1 9.0 8.6 8.6 6.7 na na na
Currency and monetary policy
Key policy rate (% YE) 19.2 14.0 10.0 17.8 9.5 11.5 9.8 11.3 9.5 8.0 na na na
Broad money growth (%YoY) 42.2 38.7 42.1 9.7 21.5 12.9 10.3 9.4 4.6 8.7 na na na
Exchange rate (EUR) annual average 83.7 84.0 79.7 82.2 94.1 104.3 102.0 113.1 113.1 117.5 121.0 123.0 124.6
Exchange rate ($) annual average 67.2 66.9 58.2 55.8 67.6 78.6 73.3 88.0 85.2 88.4 108.8 110.0 110.2
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
2074
Slovenia 682
Figure 682: Slovenia key economic indicators
Ratings (M/S&P/F) Baa3/A-/BBB+
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.0 5.7 6.9 3.3 -7.8 1.2 0.6 -2.7 -1.1 3.0 2.3 1.8 2.0
Investment (% GDP) 28.4 30.2 32.9 32.7 23.4 22.2 21.7 18.8 19.4 19.8 19.8 19.3 19.6
Unemployment rate year-end (%) 6.5 6.0 4.9 4.4 5.9 7.3 8.2 8.9 10.1 9.7 8.7 8.1 7.6
Nominal GDP (lcl bn) 29.2 31.6 35.2 38.0 36.2 36.3 36.9 36.0 35.9 37.3 38.4 39.4 40.8
Nominal GDP ($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 ($) 18,219 19,781 23,964 27,788 24,789 23,499 25,043 22,514 23,162 24,051 20,715 21,304 22,274
Stock of bank credit (lcl, bn) 16.2 20.5 27.2 31.8 32.8 33.4 32.6 31.8 26.3 22.8 22.3 22.6 na
Lending/GDP (%) 55.4 64.8 77.5 83.8 90.7 92.2 88.2 88.3 73.2 61.1 58.2 57.3 na
Gross domestic saving (% of GDP) 26.6 28.3 28.7 27.4 22.8 22.1 21.9 21.3 25.0 26.8 26.6 25.5 25.4
Prices
CPI (average % YoY) 2.5 2.5 3.6 5.7 0.9 1.8 1.8 2.6 1.8 0.2 -0.4 0.7 1.5
CPI (year-end, % YoY) 2.3 2.8 5.6 2.1 1.8 1.8 2.1 2.6 0.7 0.2 -0.2 1.9 1.9
Fiscal balance (% of GDP)
Consolidated government balance -1.0 -0.8 0.3 -0.3 -5.4 -5.2 -5.5 -3.1 -13.9 -5.8 -3.7 -5.3 -5.0
Total public debt (% of GDP) 26.3 26.0 22.7 21.6 34.4 37.9 46.1 53.4 70.5 80.8 81.8 82.7 85.7
External indicators
Exports ($bn) 19.2 23.3 30.1 34.2 26.2 29.1 34.6 32.1 33.9 36.0 na na na
Imports ($bn) 20.3 24.2 31.6 37.1 26.5 30.1 35.5 32.0 33.3 34.0 na na na
Trade balance ($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
Exports (% YoY, value) 33.8 21.0 29.6 13.6 -23.5 11.2 18.9 -7.3 5.5 6.3 na na na
Imports (% YoY, value) 10.4 19.2 30.8 17.4 -28.6 13.4 18.0 -9.7 3.9 2.2 na na na
FX reserves (ex gold, US$bn) 8.1 7.0 1.0 0.9 1.0 0.9 0.8 0.8 0.8 0.9 na na na
Import cover (months of imports) 4.8 3.5 0.4 0.3 0.4 0.4 0.3 0.3 0.3 0.3 na na na
Currency and monetary policy
Key policy rate (% YE) 2.3 3.5 4.0 2.5 1.0 1.0 1.0 0.8 0.3 0.1 na na na
Broad money growth (%YoY) 7.3 10.1 11.6 7.7 -0.3 1.1 1.6 3.5 1.0 3.7 na na na
Exchange rate (EUR) annual average 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Exchange rate ($) annual average 1.25 1.26 1.37 1.47 1.39 1.33 1.39 1.29 1.33 1.33 1.11 1.12 1.13
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) 24.7 23.6 23.0 22.5 23.7 24.9 24.8 24.9 24.7 25.1 25.8 25.8 25.6
Nominal GDP (lcl bn) 1,639 1,839 2,110 2,369 2,508 2,748 3,025 3,263 3,534 3,796 4,035 4,327 4,670
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
Stock of bank credit (lcl, bn) 1,080 1,354 1,652 1,817 1,871 1,933 2,044 2,233 2,381 2,552 2,756 2,977 na
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
Gross domestic saving (% of GDP) 15.2 15.7 15.6 17.6 18.0 18.0 17.0 15.1 14.4 14.9 15.6 15.3 15.1
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
Fiscal balance (% of GDP)
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
Total public debt (% of GDP) 31.8 29.8 27.1 25.9 30.3 34.4 37.6 40.5 43.3 46.0 48.4 49.8 50.8
External indicators
Exports ($bn) 51.6 52.4 63.5 73.0 54.4 91.3 97.4 99.6 96.0 91.1 na na na
Imports ($bn) 59.7 74.8 94.1 99.6 73.8 90.9 109.6 114.1 113.3 109.4 na na na
Trade balance ($bn) -8.1 -22.3 -30.6 -26.6 -19.4 0.4 -12.2 -14.6 -17.3 -18.2 na na na
Trade balance (% of GDP) -3.1 -8.2 -10.2 -9.2 -6.5 0.1 -2.9 -3.7 -4.7 -5.2 na na na
Current account balance ($bn) -8.1 -12.2 -16.1 -15.9 -8.1 -5.6 -9.0 -19.7 -21.1 -19.1 -13.7 -14.8 -15.5
Current account balance (% of GDP) -3.1 -4.5 -5.4 -5.5 -2.7 -1.5 -2.2 -5.0 -5.8 -5.4 -4.3 -4.5 -4.5
Net FDI ($bn) 5.6 -5.3 3.6 12.0 6.3 3.9 4.3 1.7 1.7 -1.2 na na na
Net FDI (% of GDP) 2.2 -2.0 1.2 4.2 2.1 1.0 1.0 0.4 0.5 -0.4 na na na
C/A balance plus FDI (% of GDP) -1.0 -6.4 -4.2 -1.4 -0.6 -0.5 -1.1 -4.5 -5.3 -5.8 na na na
Exports (% YoY, value) 13.2 1.7 21.1 15.0 -25.5 67.9 6.6 2.2 -3.6 -5.0 na na na
Imports (% YoY, value) 15.0 25.4 25.9 5.8 -25.9 23.2 20.5 4.1 -0.7 -3.4 na na na
FX reserves (ex gold, US$bn) 18.6 23.1 29.6 30.6 35.2 38.2 42.6 44.0 44.9 44.3 na na na
Import cover (months of imports) 3.7 3.7 3.8 3.7 5.7 5.0 4.7 4.6 4.8 4.9 na na na
Currency and monetary policy
Key policy rate (% YE) 7.0 9.0 11.0 11.5 7.0 5.5 5.5 5.0 5.0 5.8 na na na
Broad money growth (%YoY) 20.7 22.6 23.9 14.7 1.8 6.9 8.3 5.2 5.9 7.3 na na na
Exchange rate (EUR) annual average 7.9 8.5 9.7 12.1 11.8 9.7 10.1 10.6 12.8 14.4 14.1 14.8 15.5
Exchange rate ($) annual average 6.4 6.8 7.1 8.3 8.4 7.3 7.3 8.2 9.7 10.8 12.7 13.3 13.7
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
209
Sri Lanka 684
Figure 684: Sri Lanka key economic indicators
Ratings (M/S&P/F) B1/B+/BB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 6.2 7.7 6.8 6.0 3.5 8.0 8.2 6.3 7.3 7.4 6.5 6.5 6.5
Investment (% GDP) 26.8 28.0 28.0 27.6 24.4 27.6 29.9 30.6 29.8 29.6 29.8 29.9 29.9
Unemployment rate year-end (%) 7.7 6.6 6.2 6.0 5.9 5.0 4.1 4.0 4.0 4.0 4.0 4.0 4.0
Nominal GDP (lcl bn) 2,453 2,939 3,579 4,411 4,835 5,604 6,543 7,579 8,674 9,785 10,624 11,703 13,002
Nominal GDP ($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 ($) 1,245 1,430 1,624 2,027 2,077 2,429 2,880 2,874 3,239 3,574 3,768 4,061 4,403
Stock of bank credit (lcl, bn) 807 998 1,190 1,266 1,196 1,492 2,005 2,356 2,533 2,584 2,713 2,848 na
Lending/GDP (%) 32.9 34.0 33.3 28.7 24.7 26.6 30.6 31.1 29.2 26.4 25.5 24.3 na
Gross domestic saving (% of GDP) 24.3 22.7 23.6 18.0 23.9 25.4 22.1 23.9 26.1 26.9 27.8 27.9 27.9
Prices
CPI (average % YoY) 11.0 10.0 15.8 22.4 3.5 6.2 6.7 7.5 6.9 3.3 1.7 3.4 4.3
CPI (year-end, % YoY) 7.5 13.5 18.7 13.9 5.0 6.8 4.9 9.2 4.7 2.1 3.2 3.6 5.0
Fiscal balance (% of GDP)
Consolidated government balance -7.0 -7.0 -6.9 -7.0 -9.9 -8.0 -6.9 -6.5 -5.9 -6.0 -5.9 -6.4 -6.2
Total public debt (% of GDP) 90.6 87.9 85.0 81.4 86.1 81.9 78.5 79.2 78.3 75.5 76.7 76.3 75.5
External indicators
Exports ($bn) 6.4 6.9 8.3 9.0 8.0 9.4 11.4 10.1 11.2 10.9 na na na
Imports ($bn) 8.9 10.3 11.2 13.9 10.1 12.9 20.7 15.8 17.9 19.2 na na na
Trade balance ($bn) -2.5 -3.4 -2.9 -4.9 -2.1 -3.5 -9.3 -5.8 -6.7 -8.3 na na na
Trade balance (% of GDP) -10.2 -11.9 -9.1 -12.0 -5.1 -7.0 -15.7 -9.7 -9.9 -11.1 na na na
Current account balance ($bn) -0.6 -1.5 -1.4 -3.9 -0.2 -1.1 -4.6 -4.0 -2.5 -2.0 -1.6 -1.7 -1.9
Current account balance (% of GDP) -2.5 -5.3 -4.3 -9.5 -0.5 -2.2 -7.8 -6.7 -3.8 -2.7 -2.0 -2.0 -2.0
Net FDI ($bn) 0.2 0.5 0.5 0.7 0.4 0.4 0.9 0.9 0.9 0.9 na na na
Net FDI (% of GDP) 1.0 1.6 1.7 1.7 0.9 0.9 1.5 1.5 1.3 1.2 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
Exports (% YoY, value) 10.9 7.8 20.5 8.1 -11.2 18.3 20.9 -11.5 11.1 -2.8 na na na
Imports (% YoY, value) 10.8 15.7 9.7 23.2 -27.1 27.4 60.5 -23.3 13.0 7.3 na na na
FX reserves (ex gold, US$bn) 2.6 2.7 3.4 2.5 4.6 6.7 6.2 6.4 6.6 7.3 na na na
Import cover (months of imports) 3.6 3.2 3.6 2.1 5.5 6.3 3.6 4.8 4.4 4.6 na na na
Currency and monetary policy
Key policy rate (% YE) 8.8 10.0 10.5 10.5 7.5 7.3 7.0 7.5 6.5 6.5 na na na
Broad money growth (%YoY) 19.6 20.7 15.6 11.7 19.9 18.0 20.9 18.3 18.0 13.1 na na na
Exchange rate (EUR) annual average 125 131 152 159 160 150 154 164 171 174 149 152 156
Exchange rate ($) annual average 100 104 111 108 115 113 111 128 129 131 134 136 138
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
210
Tanzania 685
Figure 685: Tanzania key economic indicators
Ratings (M/S&P/F) NR/NR/NR
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
Gross national saving (% of GDP) 20.9 22.3 22.6 22.3 18.9 21.8 21.7 19.5 15.1 21.9 22.7 23.9 24.5
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
Loan to deposit ratio 43.6 48.0 56.9 70.9 64.6 62.3 67.1 69.9 68.7 70.0 70.5 71.0 72.0
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
Fiscal balance (% of GDP)
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
Total public debt 46.8 32.8 21.6 21.6 24.3 27.5 28.0 29.2 31.2 34.7 38.5 39.2 39.1
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
Trade balance (US$bn) -1.3 -1.9 -2.6 -3.4 -2.5 -2.8 -4.7 -5.1 -5.5 -5.7 -5.1 -4.8 -5.2
Trade balance (% of GDP) -7.6 -10.4 -12.2 -12.6 -8.9 -9.4 -14.3 -13.1 -12.4 -12.0 -11.6 -11.1 -11.4
Current account balance (US$bn) -0.8 -1.2 -1.7 -2.6 -1.8 -1.9 -4.0 -4.5 -4.6 -4.5 -3.8 -3.3 -3.5
Current account balance (% of GDP) -5.0 -6.3 -7.9 -9.4 -6.3 -6.4 -12.0 -11.7 -10.5 -9.4 -8.5 -7.7 -7.7
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
Import cover (months of imports) 8.2 6.6 6.7 4.9 7.3 6.6 4.5 4.6 4.8 4.5 4.2 4.3 4.0
Debt indicators
Gross external debt (US$bn) 8.5 7.2 5.8 7.0 8.2 9.6 10.4 8.8 11.1 11.9 14.8 14.8 15.8
Gross external debt (% of GDP) 50.0 38.4 27.1 25.7 28.8 31.9 31.4 22.7 25.3 24.8 33.4 33.8 34.9
Gross external debt (% of exports) 498.8 372.9 262.6 195.6 248.6 222.9 203.1 160.4 203.9 211.8 243.4 219.0 216.1
Total debt service (US$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
Total debt service (% of exports) 6.0 2.7 1.7 1.8 1.4 1.4 1.5 3.6 3.0 3.3 4.0 8.0 8.1
Interest & exchange rates
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
Credit to the private sector (%YoY) 34.4 46.9 42.2 47.0 9.8 20.6 27.6 17.9 15.3 19.4 16.4 15.4 16.0
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
3M interest rate spread over $-Libor (ppt) 10.1 9.1 3.9 8.4 5.5 4.5 11.5 11.4 13.1 12.6 10.0 8.8 8.4
5Y yield (% YE) 17.0 15.2 17.6 16.4 13.5 11.6 13.2 14.9 15.4 14.6 12.3 14.1 14.7
Exchange rate (TZS/EUR) year-end 1,361 1,668 1,683 1,838 1,920 1,987 2,050 2,091 2,192 2,013 2,211 2,464 2,769
Exchange rate (TZS/EUR) annual average 1,401 1,572 1,701 1,764 1,849 1,914 2,209 2,040 2,148 2,280 2,461 2,568 2,786
Exchange rate (TZS/$) 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/$) annual average 1,126 1,251 1,241 1,199 1,326 1,442 1,586 1,587 1,617 1,664 2,010 2,303 2,472
Source: IMF, UNCTAD, Bank of Tanzania, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
211
Tunisia 686
Figure 686: Tunisia key economic indicators
Ratings (M/S&P/F) Ba3/NR/BB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.0 5.7 6.3 4.5 3.1 2.6 -1.9 3.7 2.3 2.3 1.0 3.0 4.0
Investment (% GDP) 21.7 23.4 23.7 25.5 24.7 25.7 23.6 24.3 22.0 21.0 21.5 21.7 21.9
Unemployment rate year-end (%) 12.8 12.5 12.4 12.4 13.3 13.0 18.9 16.7 15.3 15.3 15.0 14.0 13.0
Nominal GDP (lcl bn) 41.9 45.8 49.9 55.3 58.9 63.1 64.7 70.7 76.4 82.6 87.4 93.3 100.9
Nominal GDP ($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 ($) 3,218 3,394 3,805 4,343 4,178 4,177 4,305 4,198 4,317 4,422 3,985 3,972 4,024
Stock of bank credit (lcl, bn) 23.3 25.1 27.5 31.7 34.8 41.5 47.0 51.0 55.0 60.0 64.8 69.9 na
Lending/GDP (%) 55.6 54.8 55.2 57.3 59.1 65.7 72.6 72.1 72.0 72.6 74.1 75.0 na
Gross domestic saving (% of GDP) 20.8 21.6 21.3 21.7 21.9 20.9 16.1 16.1 13.8 12.2 13.0 14.6 15.7
Prices
CPI (average % YoY) 2.4 3.2 3.0 4.3 3.7 3.3 3.5 5.1 5.8 4.9 5.0 4.0 3.9
CPI (year-end, % YoY) 3.7 2.6 3.9 4.4 3.3 3.3 3.9 5.9 5.7 4.8 4.4 4.0 3.9
Fiscal balance (% of GDP)
Consolidated government balance -2.7 -2.6 -2.6 -0.7 -2.4 -0.5 -3.2 -4.8 -6.0 -3.7 -5.7 -4.0 -3.2
Total public debt (% of GDP) 52.5 48.8 45.9 43.3 42.8 40.7 44.5 44.5 44.3 50.0 54.0 56.3 57.2
External indicators
Exports ($bn) 10.1 11.4 14.8 18.6 14.0 15.8 17.2 16.3 16.3 15.4 na na na
Imports ($bn) 13.3 15.0 19.1 24.5 19.2 21.9 23.5 24.0 23.7 26.0 na na na
Trade balance ($bn) -3.2 -3.7 -4.3 -5.9 -5.2 -6.0 -6.4 -7.7 -7.4 -10.7 na na na
Trade balance (% of GDP) -10.0 -10.6 -11.0 -13.2 -11.9 -13.7 -13.8 -17.1 -15.8 -21.9 na na na
Current account balance ($bn) -0.3 -0.6 -0.9 -1.7 -1.2 -2.1 -3.4 -3.7 -3.9 -4.3 -3.8 -3.1 -2.8
Current account balance (% of GDP) -0.9 -1.8 -2.4 -3.8 -2.8 -4.8 -7.5 -8.2 -8.3 -8.8 -8.5 -7.0 -6.2
Net FDI ($bn) 0.7 3.2 1.5 2.6 1.5 1.3 0.4 1.6 1.1 1.0 na na na
Net FDI (% of GDP) 2.2 9.4 3.9 5.8 3.5 3.0 0.9 3.4 2.3 2.1 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
Exports (% YoY, value) 7.6 12.6 30.1 25.9 -25.0 13.5 8.3 -5.0 0.2 -5.9 na na na
Imports (% YoY, value) 2.6 12.8 26.9 28.7 -21.9 14.2 7.5 2.1 -1.2 9.7 na na na
FX reserves (ex gold, US$bn) 4.4 6.8 7.9 8.8 11.1 9.5 7.5 8.4 7.3 7.2 na na na
Import cover (months of imports) 4.0 5.4 4.9 4.3 6.9 5.2 3.8 4.2 3.7 3.3 na na na
Currency and monetary policy
Key policy rate (% YE) na na na na na na na na na na na na na
Broad money growth (%YoY) 11.1 11.1 12.5 14.2 12.7 12.2 9.1 8.5 6.1 8.7 na na na
Exchange rate (EUR) annual average 1.62 1.67 1.76 1.81 1.88 1.90 1.96 2.01 2.16 2.26 2.20 2.34 2.50
Exchange rate ($) annual average 1.30 1.33 1.28 1.23 1.35 1.43 1.41 1.56 1.62 1.70 1.97 2.09 2.21
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
2124
Turkey 687
Figure 687: Turkey key economic indicators
Ratings (M/S&P/F) Baa3/BB+/BBB-
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
Unemployment rate year-end (%) 9.5 9.0 9.2 10.0 13.1 11.1 9.1 8.4 9.0 9.9 10.8 11.2 10.9
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
Gross domestic saving (% of GDP) 15.5 16.0 15.2 16.3 13.0 13.3 13.9 14.0 12.8 14.4 16.0 16.0 15.6
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
Fiscal balance (% of GDP)
Consolidated government balance -0.8 -0.7 -2.0 -2.7 -6.0 -3.4 -0.6 -1.7 -1.3 -1.0 -0.8 -0.8 -0.8
Total public debt (% of GDP) 52.7 46.5 39.9 40.0 46.1 42.3 39.1 36.2 36.1 33.6 32.1 32.6 34.5
External indicators
Exports ($bn) 73.5 85.4 107.2 132.0 102.1 113.9 134.9 152.5 151.8 157.6 na na na
Imports ($bn) 116.6 139.5 170.0 202.0 140.9 185.5 240.8 236.5 251.7 242.2 na na na
Trade balance ($bn) -43.1 -54.0 -62.8 -69.9 -38.8 -71.7 -105.9 -84.1 -99.9 -84.6 na na na
Trade balance (% of GDP) -8.9 -10.2 -9.7 -9.6 -6.3 -9.8 -13.7 -10.7 -12.1 -10.6 na na na
Current account balance ($bn) -21.4 -31.8 -37.8 -40.2 -12.0 -45.3 -75.0 -48.5 -64.7 -46.5 -32.7 -34.1 -39.4
Current account balance (% of GDP) -4.4 -6.0 -5.8 -5.5 -2.0 -6.2 -9.7 -6.2 -7.9 -5.8 -4.5 -4.7 -5.2
Net FDI ($bn) 9.0 19.3 19.9 17.3 7.0 7.6 13.8 9.2 8.8 5.5 na na na
Net FDI (% of GDP) 1.9 3.6 3.1 2.4 1.1 1.0 1.8 1.2 1.1 0.7 na na na
C/A balance plus FDI (% of GDP) -2.6 -2.4 -2.8 -3.1 -0.8 -5.2 -7.9 -5.0 -6.8 -5.1 na na na
Exports (% YoY, value) 16.6 16.2 25.5 23.2 -22.6 11.5 18.5 13.0 -0.4 3.8 na na na
Imports (% YoY, value) 19.7 19.6 21.9 18.8 -30.2 31.7 29.8 -1.8 6.4 -3.8 na na na
FX reserves (ex gold, US$bn) 50.6 60.9 73.4 70.4 70.9 80.7 78.3 99.9 110.9 106.9 na na na
Import cover (months of imports) 5.2 5.2 5.2 4.2 6.0 5.2 3.9 5.1 5.3 5.3 na na na
Currency and monetary policy
Key policy rate (% YE) 13.5 17.5 15.8 15.0 6.5 1.5 5.0 5.0 3.5 7.5 na na na
Broad money growth (%YoY) 36.0 22.2 15.2 24.8 12.7 18.5 15.2 10.4 21.2 11.2 na na na
Exchange rate (EUR) annual average 1.67 1.80 1.79 1.91 2.16 1.99 2.33 2.31 2.53 2.91 3.06 3.41 3.58
Exchange rate ($) annual average 1.34 1.43 1.30 1.30 1.55 1.50 1.68 1.80 1.90 2.19 2.75 3.05 3.17
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
213
UAE 688
Figure 688: UAE key economic indicators
Ratings (M/S&P/F) Aa2/AA/AA
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 4.9 9.8 3.2 3.2 -5.2 1.6 4.9 7.2 4.3 4.6 3.0 3.1 3.3
Investment (% GDP) 19.2 18.4 24.4 23.7 30.2 26.1 22.4 23.1 23.2 24.7 24.2 24.7 24.2
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 663 816 947 1,159 931 1,051 1,276 1,371 1,422 1,467 1,245 1,308 1,405
Nominal GDP ($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 ($) 43,989 44,317 41,472 39,073 30,920 34,614 40,819 42,590 42,874 42,942 35,391 36,142 37,737
Stock of bank credit (lcl, bn) 290 386 531 777 787 792 819 833 952 999 1,049 1,112 na
Lending/GDP (%) 43.8 47.3 56.0 67.1 84.5 75.4 64.2 60.7 66.9 68.1 84.2 85.0 na
Gross domestic saving (% of GDP) 36.7 40.9 36.9 30.8 33.3 28.6 37.1 44.5 41.6 38.3 27.1 27.8 29.0
Prices
CPI (average % YoY) 6.2 9.3 11.1 12.3 1.6 0.9 0.9 0.7 1.1 2.3 3.7 3.0 2.7
CPI (year-end, % YoY) 7.8 10.2 11.7 6.6 1.2 0.9 0.8 0.9 1.7 3.0 3.3 3.0 2.7
Fiscal balance (% of GDP)
Consolidated government balance 20.2 25.3 21.8 20.1 -4.3 2.0 6.3 10.9 10.4 5.0 -5.5 -4.0 -1.8
Total public debt (% of GDP) 6.6 6.8 7.9 12.5 24.1 22.2 17.6 17.0 15.9 15.7 18.9 18.3 17.4
External indicators
Exports ($bn) 97.5 119.6 136.8 195.8 122.1 176.0 240.4 259.1 267.2 257.1 na na na
Imports ($bn) 108.1 122.9 150.3 206.5 155.8 178.4 218.8 242.7 257.5 268.3 na na na
Trade balance ($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
Current account balance ($bn) 31.5 49.9 32.3 22.3 7.8 7.2 50.9 79.6 71.4 54.6 9.8 11.0 18.3
Current account balance (% of GDP) 17.4 22.5 12.5 7.1 3.1 2.5 14.7 21.3 18.4 13.7 2.9 3.1 4.8
Net FDI ($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
C/A balance plus FDI (% of GDP) 21.4 23.3 12.4 6.4 3.6 3.8 16.2 23.2 20.4 15.4 na na na
Exports (% YoY, value) 38.9 22.7 14.3 43.2 -37.7 44.2 36.6 7.8 3.1 -3.8 na na na
Imports (% YoY, value) 42.8 13.7 22.3 37.4 -24.6 14.5 22.6 10.9 6.1 4.2 na na na
FX reserves (ex gold, US$bn) 21.0 27.6 77.2 31.7 26.1 32.8 37.3 47.0 68.2 78.4 na na na
Import cover (months of imports) 2.3 2.7 6.2 1.8 2.0 2.2 2.0 2.3 3.2 3.5 na na na
Currency and monetary policy
Key policy rate (% YE) na na na na na na na na na na na na na
Broad money growth (%YoY) na na na na 5.9 4.0 1.6 8.2 12.6 9.2 na na na
Exchange rate (EUR) annual average 4.58 4.61 5.03 5.40 5.12 4.87 5.11 4.72 4.88 4.88 4.09 4.11 4.15
Exchange rate ($) annual average 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
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
Unemployment rate year-end (%) na na na na na na na na na na na na na
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
Gross domestic saving (% of GDP) 27.4 24.4 26.5 20.1 21.2 16.9 18.7 21.5 22.0 20.6 22.8 23.6 23.4
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
Fiscal balance (% of GDP)
Consolidated government balance -0.2 -0.7 -0.9 -2.5 -2.1 -5.7 -2.7 -3.0 -4.0 -3.5 -3.6 -4.2 -4.3
Total public debt (% of GDP) 48.2 31.7 19.6 19.3 19.2 22.9 23.6 24.2 27.6 31.4 35.0 37.9 41.1
External indicators
Exports ($bn) 0.8 1.0 1.3 1.7 1.2 1.4 1.7 1.7 1.8 1.9 na na na
Imports ($bn) 2.1 2.6 3.5 4.5 3.0 3.5 4.6 4.6 4.6 4.6 na na na
Trade balance ($bn) -1.2 -1.6 -2.2 -2.8 -1.8 -2.1 -2.9 -2.9 -2.7 -2.7 na na na
Trade balance (% of GDP) -11.3 -12.9 -14.2 -15.4 -9.5 -10.2 -13.9 -11.8 -10.7 -9.7 na na na
Current account balance ($bn) -0.3 -0.4 -0.7 -1.4 -1.2 -1.8 -2.3 -2.0 -1.9 -2.7 -2.6 -3.0 -3.5
Current account balance (% of GDP) -2.3 -3.6 -4.5 -7.7 -6.4 -9.1 -10.8 -8.0 -7.2 -9.7 -10.5 -11.3 -12.0
Net FDI ($bn) 0.4 0.6 0.8 0.7 0.8 0.5 0.9 1.1 1.1 1.1 na na na
Net FDI (% of GDP) 3.5 5.2 5.2 4.0 4.5 2.7 4.2 4.5 4.4 4.2 na na na
C/A balance plus FDI (% of GDP) 1.2 1.7 0.7 -3.7 -1.8 -6.5 -6.5 -3.5 -2.8 -5.5 na na na
Exports (% YoY, value) 24.3 18.4 38.9 28.9 -28.8 14.0 18.2 2.3 7.9 6.0 na na na
Imports (% YoY, value) 19.0 24.5 36.7 29.5 -33.7 15.6 32.5 -0.1 -0.6 0.9 na na na
FX reserves (ex gold, US$bn) 1.3 1.8 2.6 2.3 3.0 2.7 2.6 3.2 3.3 3.3 na na na
Import cover (months of imports) 7.9 8.5 8.8 6.1 12.0 9.4 6.8 8.3 8.8 8.6 na na na
Currency and monetary policy
Key policy rate (% YE) na na na na na na 23.0 12.0 11.5 11.0 na na na
Broad money growth (%YoY) 17.2 16.9 22.0 30.8 17.5 38.1 12.4 14.9 9.5 15.2 na na na
Exchange rate (EUR) annual average 2,218 2,300 2,362 2,532 2,828 2,889 3,510 3,220 3,436 3,455 3,561 3,720 3,769
Exchange rate ($) annual average 1,781 1,831 1,723 1,720 2,031 2,178 2,523 2,505 2,587 2,600 3,200 3,328 3,335
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg
Renaissance Capital 11 November 2015
Facing the spectre
215
Ukraine 690
Figure 690: Ukraine key economic indicators
Ratings (M/S&P/F) Ca/B-/RD
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) 3.1 7.6 8.2 2.2 -15.1 0.3 5.5 0.2 0.0 -6.8 -9.0 2.0 3.5
Investment (% GDP) 22.5 24.5 27.8 27.4 17.1 20.9 22.4 21.7 18.5 14.1 11.6 12.5 13.0
Unemployment rate year-end (%) 7.2 6.8 6.4 6.4 8.8 8.1 7.9 7.5 7.3 9.3 11.5 11.0 9.4
Nominal GDP (lcl bn) 457 565 751 991 947 1,079 1,300 1,405 1,465 1,567 1,981 2,262 2,572
Nominal GDP ($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 ($) 1,910 2,408 3,220 4,095 2,655 2,983 3,590 3,883 4,435 3,051 2,109 2,199 2,451
Stock of bank credit (lcl, bn) 153 255 444 755 737 747 822 854 965 1,074 1,181 1,240 na
Lending/GDP (%) 33.4 45.2 59.1 76.2 77.8 69.2 63.2 60.8 65.8 68.5 59.6 54.8 na
Gross domestic saving (% of GDP) 25.3 23.1 24.2 20.6 15.6 18.7 16.2 13.6 9.3 10.1 9.9 10.8 11.6
Prices
CPI (average % YoY) 13.5 9.1 12.8 25.2 15.9 9.4 8.0 0.6 -0.3 12.1 50.0 14.2 9.9
CPI (year-end, % YoY) 10.3 11.6 16.6 22.3 12.3 9.1 4.6 -0.2 0.5 24.9 45.8 12.0 8.0
Fiscal balance (% of GDP)
Consolidated government balance -2.2 -1.3 -1.9 -3.0 -6.0 -5.8 -2.8 -4.3 -4.8 -4.5 -4.2 -3.7 -3.1
Total public debt (% of GDP) 17.1 14.3 11.8 19.7 34.1 40.6 36.9 37.5 40.7 71.2 94.4 92.1 87.8
External indicators
Exports ($bn) 34.0 38.1 49.2 66.9 39.8 51.4 68.4 68.8 63.3 53.9 na na na
Imports ($bn) 36.2 45.0 60.1 85.5 45.5 60.7 82.6 84.7 77.0 54.4 na na na
Trade balance ($bn) -2.2 -6.8 -10.8 -18.7 -5.6 -9.3 -14.2 -15.8 -13.7 -0.5 na na na
Trade balance (% of GDP) -2.4 -6.1 -7.3 -9.9 -4.6 -6.8 -8.7 -9.0 -7.6 -0.4 na na na
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
Net FDI (% of GDP) 8.4 5.1 6.2 5.3 3.8 4.2 4.3 4.1 2.3 0.2 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
Exports (% YoY, value) 4.1 12.2 29.2 35.8 -40.5 29.1 33.0 0.6 -8.0 -14.8 na na na
Imports (% YoY, value) 24.7 24.4 33.6 42.4 -46.8 33.6 36.0 2.5 -9.1 -29.3 na na na
FX reserves (ex gold, US$bn) 19.0 21.8 31.8 30.8 25.6 33.3 30.4 22.7 18.8 6.6 na na na
Import cover (months of imports) 6.3 5.8 6.3 4.3 6.7 6.6 4.4 3.2 2.9 1.5 na na na
Currency and monetary policy
Key policy rate (% YE) 9.5 8.5 8.0 12.0 10.3 7.8 7.5 7.5 3.5 14.0 na na na
Broad money growth (%YoY) 54.4 34.5 51.7 30.2 -5.5 22.7 14.7 12.8 17.6 5.3 na na na
Exchange rate (EUR) annual average 6.4 6.3 6.9 7.7 10.9 10.5 11.1 10.3 10.8 15.9 24.4 27.0 27.9
Exchange rate ($) annual average 5.1 5.0 5.0 5.3 7.8 7.9 8.0 8.0 8.2 12.0 22.0 24.1 24.7
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Gross external debt (US$mn)
Gross external debt (% of GDP)
Gross external debt (% of exports)
Interest & exchange rates
Broad money supply (%YoY) year-end
Key policy rate (%) year-end
Exchange rate (VND/€) year-end
Exchange rate (VND/€) annual average
Exchange rate (VND/US$) year-end
Exchange rate (VND/US$) annual average
Renaissance Capital 11 November 2015
Facing the spectre
216
Vietnam 691
Figure 691: Vietnam key economic indicators
Ratings (M/S&P/F) B1/BB-/BB-
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (%YoY) 7.5 7.0 7.1 5.7 5.4 6.4 6.2 5.2 5.4 6.0 6.8 6.3 7.6
Private consumption (%YoY) 5.8 7.5 9.8 7.7 2.3 8.2 4.1 4.9 5.2 6.1 9.0 5.0 6.0
Government consumption (%YoY) 8.2 8.5 8.9 7.5 7.6 12.3 7.1 7.2 7.3 7.0 10.0 6.5 7.0
Investment (%YoY) 9.8 9.9 24.2 3.8 8.7 10.9 -7.8 1.9 5.3 9.3 9.5 7.0 9.5
Industrial production (%YoY) na na na 7.4 7.1 9.3 6.8 7.4 6.0 7.4 9.8 9.0 9.5
Unemployment rate year-end (%) 5.3 4.8 4.6 4.7 4.6 4.3 4.5 2.7 2.8 2.5 2.5 2.5 2.5
Nominal GDP (lcl tn) 914 1,062 1,247 1,616 1,809 2,158 2,780 3,245 3,584 3,938 4,294 4,731 5,165
Nominal GDP (US$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$) 700 797 920 1154 1182 1298 1532 1752 1900 2050 2131 2130 2188
Gross national saving (% of GDP) 32.8 34.3 30.5 25.5 30.7 31.9 29.9 33.2 31.1 30.5 24.6 23.5 24.2
Stock of bank credit (lcl, tn) 553 694 1,068 1,339 1,869 2,476 2,830 3,078 3,470 3,950 4,661 5,080 na
Lending/GDP (%) 60.5 65.4 85.6 82.9 103.3 114.7 101.8 94.8 96.8 100.3 108.5 107.4 0.0
Deposits (lcl bn) na na na na na na na na na na na na na
Loan to deposit ratio (%) na na na na na na na na na na na na na
Prices
CPI (average %YoY) 8.4 7.5 8.4 23.1 6.7 9.2 18.7 9.1 6.6 4.1 2.2 3.1 3.8
CPI (end-year %YoY) 8.8 6.7 12.6 19.9 6.5 11.7 18.1 6.8 6.0 1.8 2.5 3.6 3.9
Fiscal balance (% of GDP)
Consolidated government balance -1.2 0.3 -2.0 -0.5 -6.0 -2.8 -1.1 -6.8 -7.4 -6.1 -6.9 -6.7 -5.9
Consolidated primary balance -0.5 1.0 -1.0 0.5 -4.9 -1.6 0.0 -5.6 -5.9 -4.5 -5.0 -4.9 -3.9
Total public debt (central govt) 36.5 38.4 40.9 39.4 45.2 48.1 46.5 48.6 52.6 57.2 61.2 63.7 66.1
External balance
Exports (US$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$mn) 9.0 13.4 23.5 23.9 16.0 12.1 13.1 25.2 25.5 33.8 36.0 36.0 38.0
Import cover (months of imports) 3.0 3.6 4.6 3.5 2.8 1.7 1.5 2.7 2.3 2.7 2.5 2.4 2.4
Debt indicators
Gross external debt (US$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
Gross external debt (% of GDP) 5.6 5.7 7.5 7.8 38.0 38.8 38.8 38.0 38.5 38.1 38.3 40.6 41.6
Gross external debt (% of exports) 9.9 9.6 12.0 12.3 68.3 61.5 54.7 51.6 49.6 47.1 45.4 45.7 44.7
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 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
Renaissance Capital 11 November 2015
Facing the spectre
217
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
Gross national saving (% of GDP) 28.2 41.3 30.5 26.3 36.2 37.4 38.1 39.7 33.0 29.7 29.5 28.1 29.5
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
Fiscal balance (% of GDP)
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
Total public debt 15.5 23.8 21.4 18.8 19.7 18.9 20.3 25.5 28.6 35.2 41.9 44.9 46.5
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$bn) 0.4 0.6 1.3 0.9 1.0 0.7 0.9 2.4 1.7 2.5 1.7 1.8 2.0
Net FDI (% of GDP) 4.2 4.8 9.4 5.2 6.3 3.5 3.7 9.7 6.3 9.3 7.2 9.7 8.5
C/A balance plus FDI (% of GDP) -3.0 4.5 4.0 -0.6 10.1 9.4 6.7 15.2 5.7 8.0 5.7 6.3 6.3
Exports (%YoY, value) 1.1 98.2 31.9 1.1 -13.5 67.6 26.4 5.5 13.9 -5.7 -5.3 5.4 10.8
Imports (%YoY, value) 48.7 14.4 36.8 18.4 -20.2 39.2 35.9 10.3 16.0 -5.4 -6.5 4.9 9.5
FX reserves (ex gold, US$bn) 0.5 0.7 1.1 1.1 1.3 1.5 1.7 2.4 2.1 2.5 2.7 2.9 3.1
Import cover (months of imports) 2.5 2.9 3.2 2.7 4.0 3.3 2.9 3.6 2.7 3.4 4.0 4.1 4.0
Debt indicators
Gross external debt (US$bn) 4.3 1.8 1.1 1.7 1.5 3.3 3.9 4.3 5.4 6.4 8.2 9.7 10.7
Gross external debt (% of GDP) 50.6 14.2 7.7 9.4 10.0 16.5 16.2 17.1 20.1 23.9 35.5 52.2 45.5
Gross external debt (% of exports) 228.4 49.2 22.3 34.2 36.1 46.7 42.8 45.0 49.7 62.2 84.4 94.6 95.0
Total debt service (US$bn) 0.3 0.1 0.1 0.1 0.5 0.3 0.2 0.5 0.3 0.3 0.4 0.6 0.6
Total debt service (% of GDP) 3.3 1.1 0.4 0.5 3.2 1.4 0.8 2.0 1.0 1.2 1.9 3.0 2.6
Total debt service (% of exports) 15.1 3.8 1.3 1.9 11.6 3.9 2.1 5.3 2.6 3.0 4.6 5.5 5.4
Interest & exchange rates
Policy rate, %YE na na na na na na na 9.3 9.8 12.5 13.5 12.5 11.5
Broad money supply (%YoY) 0.2 45.0 26.6 21.8 8.0 30.8 21.6 23.1 12.8 12.6 22.1 20.0 19.0
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
3M interest rate spread over $-Libor (ppt) 10.5 3.4 5.5 11.1 4.5 5.5 6.0 7.3 7.5 12.4 14.2 12.1 10.6
5Y yield (% YE) na 13.6 15.7 19.0 17.1 13.0 15.4 13.5 16.5 18.7 25.0 22.0 19.0
Exchange rate (ZMK/EUR) year-end 3.96 5.84 5.63 6.69 6.65 6.40 6.64 6.87 7.61 7.73 13.3 10.6 10.6
Exchange rate (ZMK/EUR) annual average 5.50 4.52 5.48 5.51 7.04 6.37 6.76 6.61 7.16 8.11 8.86 11.8 10.6
Exchange rate (ZMK/$) 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/$) annual average 4.42 3.60 4.00 3.75 5.05 4.80 4.86 5.14 5.39 6.16 7.94 11.0 9.70
Source: IMF, UNCTAD, Bank of Zambia, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
218
Zimbabwe 693
Figure 693: Zimbabwe key economic indicators
Ratings (M/S&P/F) NR/NR/NR
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E
Activity
Real GDP (% YoY) -7.7 -3.6 -3.4 -16.6 7.5 11.4 11.9 10.6 4.5 3.3 1.4 2.4 3.0
Investment (% GDP) na na na na 15.1 23.9 22.4 13.5 13.0 13.1 12.9 12.8 13.1
Unemployment rate year-end (%) na na na na na na na na na na na na na
Nominal GDP (lcl bn) 7.8 7.2 6.9 5.9 8.2 9.4 11.0 12.5 13.5 13.8 13.9 14.3 15.0
Nominal GDP ($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 ($) 655 598 576 490 667 765 866 961 1,028 1,043 1,037 1,054 1,094
Stock of bank credit (lcl, bn) na na na 0.4 0.8 1.7 2.7 3.4 3.9 4.1 4.3 4.4 na
Lending/GDP (%) na na na 6.7 9.3 17.6 24.2 27.3 28.9 29.6 30.7 30.8 na
Gross domestic saving (% of GDP) n/a n/a n/a n/a -32.0 8.0 -8.5 -11.0 -12.5 -8.9 -10.1 -7.1 -6.2
Prices
CPI (average % YoY) -31.5 33.0 -72.7 157.0 6.2 3.0 3.5 3.7 1.6 -0.2 -1.6 0.0 0.9
CPI (year-end, % YoY) n/a n/a n/a n/a -7.7 3.2 4.9 2.9 0.3 -0.8 -0.7 0.5 1.2
Fiscal balance (% of GDP)
Consolidated government balance -6.4 -2.5 -3.0 -2.0 -2.1 0.7 -1.3 -0.6 -1.9 -1.5 -1.3 -0.5 -1.0
Total public debt (% of GDP) 38.6 44.7 50.1 68.9 68.3 63.2 51.8 56.7 54.2 53.4 69.3 57.5 58.3
External indicators
Exports ($bn) 1.4 0.9 2.5 2.4 1.3 1.7 2.5 2.5 2.7 2.7 na na na
Imports ($bn) 2.1 2.8 2.7 3.4 3.0 4.1 5.0 5.2 5.3 4.9 na na na
Trade balance ($bn) -0.7 -1.9 -0.2 -1.0 -1.7 -2.4 -2.4 -2.7 -2.6 -2.2 na na na
Trade balance (% of GDP) -8.7 -26.1 -2.3 -16.4 -20.3 -25.5 -22.3 -21.8 -19.4 -15.9 na na na
Current account balance ($bn) -0.6 -0.5 -0.4 -1.0 -3.8 -1.5 -3.4 -3.1 -3.4 -3.0 -3.2 -3.1 -3.1
Current account balance (% of GDP) -8.1 -6.5 -5.4 -16.6 -47.1 -16.0 -30.9 -24.6 -25.4 -22.0 -22.9 -21.8 -20.9
Net FDI ($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
FX reserves (ex gold, US$bn) 0.1 0.2 0.1 0.1 0.8 0.7 0.7 0.6 0.5 0.4 na na na
Import cover (months of imports) 0.6 0.7 0.7 0.3 3.3 2.1 1.6 1.3 1.1 0.9 na na na
Currency and monetary policy
Key policy rate (% YE) na na na na na na na na na na na na na
Broad money growth (%YoY) na na na na na na na na na na na na na
Exchange rate (EUR) annual average 1.25 1.26 1.37 1.47 1.39 1.33 1.39 1.29 1.33 1.33 1.11 1.12 1.13
Exchange rate ($) annual average 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates
Source: IMF, UNCTAD, Bloomberg
Source: IMF, UNCTAD, Bank of Zambia, Bloomberg, Renaissance Capital estimates
Renaissance Capital 11 November 2015
Facing the spectre
219
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
220
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.
Each research analyst also certifies that no part of his or her compensation was, or will be, directly or indirectly related to the specific ratings, forecasts, estimates, opinions or views in this research report. Research analysts’ compensation is determined based upon activities and services intended to benefit the investor clients of Renaissance Securities (Cyprus) Limited and any of its affiliates (“Renaissance Capital”). Like all of Renaissance Capital’s employees, research analysts receive compensation that is impacted by overall Renaissance Capital profitability, which includes revenues from other business units within Renaissance Capital.
Important issuer disclosures
Important issuer disclosures outline currently known conflicts of interest that may unknowingly bias or affect the objectivity of the analyst(s) with respect to an issuer that is the subject matter of this report. Disclosure(s) apply to Renaissance Securities (Cyprus) Limited or any of its direct or indirect subsidiaries or affiliates (which are individually or collectively referred to as “Renaissance Capital”) with respect to any issuer or the issuer’s securities.
A complete set of disclosure statements associated with the issuers discussed in this Report is available using the ‘Stock Finder’ or ‘Bond Finder’ for individual issuers on the Renaissance Capital Research Portal at: http://research.rencap.com/eng/default.asp
This Communication is for information purposes only. The Communication does not form a fiduciary relationship or constitute advice and is not and should not be construed as a recommendation or an offer or a solicitation of an offer of securities or related financial instruments, or an invitation or inducement to engage in investment activity, and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated price. The Communication is not an advertisement of securities nor independent investment research, and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Opinions expressed therein may differ or be contrary to opinions expressed by other business areas or groups of the Renaissance Capital as a result of using different assumptions and criteria. All such information is subject to change without notice, and neither Renaissance Capital nor any of its subsidiaries or affiliates is under any obligation to update or keep current the information contained in the Communication or in any other medium.
Descriptions of any company or issuer or their securities or the markets or developments mentioned in the Communication are not intended to be complete. The Communication should not be regarded by recipients as a substitute for the exercise of their own judgment as the Communication has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives and nothing in this material is or should be considered to be financial, investment or other advice on which reliance should be placed. Any reliance you place on such information is therefore strictly at your own risk. The application of taxation laws depends on an investor’s individual circumstances and, accordingly, each investor should seek independent professional advice on taxation implications before making any investment decision. The Communication has been compiled or arrived at based on information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified, is provided on an ‘as is’ basis and no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, merchantability or fitness for a particular purpose of such information, except with respect to information concerning Renaissance Capital, its subsidiaries and affiliates. All statements of opinion and all projections, forecasts, or statements relating to expectations regarding future events or the possible future performance of investments represent Renaissance Capital’s own assessment and interpretation of information available to them currently. Any information relating to past performance of an investment does not necessarily guarantee future performance.
The Communication is not intended for distribution to the public and may be confidential. It may not be reproduced, redistributed or published, in whole or in part, for any purpose without the written permission of Renaissance Capital, and neither Renaissance Capital nor any of its affiliates accepts any liability whatsoever for the actions of third parties in this respect. The information may not be used to create any financial instruments or products or any indices. Neither Renaissance Capital and its affiliates, nor their directors, representatives, or employees accept any liability for any direct or consequential loss or damage arising out of the use of all or any part of the Communication.
© 2015 Renaissance Securities (Cyprus) Limited. All rights reserved. Regulated by the Cyprus Securities and Exchange Commission (Licence No: KEPEY 053/04).
Disclosures appendix
Renaissance Capital 11 November 2015
Facing the spectre
Renaissance Capital 12 November 2015
Facing the spectre
221
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
Renaissance Capital research team
Head of Research & Turkish Product Michael Harris +44 (203) 379-7982 MHarris2@rencap.com
Deputy Head of Research David Ferguson +7 (495) 641-4189 DFerguson@rencap.com
Head of Nigerian Research Adesoji Solanke +234 (1) 448-5300 x5384 ASolanke@rencap.com
Head of South African Research Johann Pretorius +27 (11) 750-1450 JPretorius2@rencap.com
Name Telephone number Coverage Name Telephone number Coverage
Macro Oil and gas
Charles Robertson +44 (203) 379-7835 Global Ildar Davletshin +7 (495) 725-5244 EMEA
Yvonne Mhango +27 (11) 750-1488 Sub-Saharan Africa Temilade Esho +234 (1) 448-5300 x5363 Sub-Saharan Africa
Oleg Kouzmin +7 (495) 258-7770 x4506 Russia/CIS Evgeny Stroinov +7 (495) 258-7770 x4046 Russia/CIS
Equity Strategy Metals and mining
Daniel Salter +44 (203) 379-7824 Global Johann Pretorius +27 (11) 750-1450 South Africa
Michael Harris +44 (203) 379-7982 Turkey Steven Friedman +27 (11) 750-1481 South Africa
Charles Robertson +44 (203) 379-7835 Global Kabelo Moshesha +27 (11) 750-1472 South Africa
Vikram Lopez +44 (203) 379-7974 x8974 Global Vladimir Sklyar +7 (495) 258-7770 x4624 Russia/CIS
Anastasia Burkhanova +7 (495) 258-7770 x4594 Russia/CIS
Financials
Armen Gasparyan +7 (495) 783-5673 Russia, CEE Diversified/Industrials
Omair Ansari +234 (1) 448-5329 CEE Seki Mutukwa +44 (203) 379-7736 Sub-Saharan Africa/MENA
Ilan Stermer +27 (11) 750-1482 South Africa
Adesoji Solanke +234 (1) 448-5300 x5384 Sub-Saharan Africa Telecoms/Transportation
Seki Mutukwa +44 (203) 379-7736 Sub-Saharan Africa/MENA Alexander Kazbegi +41 (78) 883-4527 Global
Olamipo Ogunsanya +234 (1) 448-5300 x5368 Sub-Saharan Africa Artem Yamschikov +7 (495) 258-7770 x7511 Russia/CIS
Consumer/Retail/Agriculture Media/Technology/Real estate
David Ferguson +7 (495) 641-4189 Russia/CIS, Africa David Ferguson +7 (495) 641-4189 Russia/CIS, Africa
Robyn Collins +27 (11) 750-1480 South Africa Ahmed Motara +27 (11) 750-1458 South Africa
Zaheer Joosub +27 (11) 750-1427 South Africa Seki Mutukwa +44 (203) 379-7736 Sub-Saharan Africa/MENA
Kirill Panarin +7 (495) 258-7770 x4009 Russia/CIS, Africa Kirill Panarin +7 (495) 258-7770 x4009 Russia/CIS, Africa
Omair Ansari +234 (1) 448-5329 Sub-Saharan Africa/CEE
Olaloye Oyawoye +234 (1) 448-5300 x5377 Sub-Saharan Africa/CEE Fertilisers
Vladimir Sklyar +7 (495) 258-7770 x4624 Russia/CIS/MENA/Pakistan
Tobacco Anastasia Burkhanova +7 (495) 258-7770 x4594 Russia/CIS/MENA/Pakistan
Mohamed Zein +971 (4) 409-2032 MENA
Utilities
Vladimir Sklyar +7 (495) 258-7770 x4624 Russia/CIS/SSA/Pakistan
Renaissance Capital research is available via the following platforms: Renaissance research portal: research.rencap.com Bloomberg: RENA <GO> Capital IQ: www.capitaliq.com
Thomson Reuters: thomsonreuters.com/financial Factset: www.factset.com
Renaissance Capital Moscow T + 7 (495) 258 7777
Renaissance Capital Ltd. London T + 44 (203) 379 7777
Renaissance Capital Johannesburg T +27 (11) 750 1400
Renaissance Securities (Cyprus) Ltd. Nicosia T + 357 (22) 505 800
Renaissance Securities (Nigeria) Ltd. Lagos T +234 (1) 448 5300
Renaissance Capital Nairobi T +254 (20) 368 2000
Renaissance Capital Istanbul T +90 (212) 362 3500
Renaissance Capital Dubai T +971 (4) 409 2000
© 2015 Renaissance Securities (Cyprus) Limited, an indirect subsidiary of Renaissance Financial Holdings Limited ("Renaissance Capital"), which together with other subsidiaries operates outside of the USA under the brand name of Renaissance Capital, for contact details see Bloomberg page RENA, or contact the relevant office. All rights reserved. This document and/or information has been prepared by and, except as otherwise specified herein, is communicated by Renaissance Securities (Cyprus) Limited, regulated by the Cyprus Securities and Exchange Commission (License No: KEPEY 053/04). The RenCap-NES Leading GDP Indicator is a model that seeks to forecast GDP growth and was developed by and is the exclusive property of Renaissance Capital and the New Economic School (e-mail: nes@nes.ru).
This document is for information purposes only. The information presented herein does not comprise a prospectus of securities for the purposes of EU Directive 2003/71/EC or Federal Law No. 39-FZ of 22 April 1994 (as amended) of the Russian Federation "On the Securities Market". Any decision to purchase securities in any proposed offering should be made solely on the basis of the information to be contained in the final prospectus published in relation to such offering. This document does not form a fiduciary relationship or constitute advice and is not and should not be construed as an offer, or a solicitation of an offer, or an invitation or inducement to engage in investment activity, and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated price. This document is not an advertisement of securities. Opinions expressed herein may differ or be contrary to opinions expressed by other business areas or groups of Renaissance Capital as a result of using different assumptions and criteria. All such information and opinions are subject to change without notice, and neither Renaissance Capital nor any of its subsidiaries or affiliates is under any obligation to update or keep current the information contained herein or in any other medium.
Descriptions of any company or companies or their securities or the markets or developments mentioned herein are not intended to be complete. This document and/or information should not be regarded by recipients as a substitute for the exercise of their own judgment as the information has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The application of taxation laws depends on an investor’s individual circumstances and, accordingly, each investor should seek independent professional advice on taxation implications before making any investment decision. The information and opinions herein have been compiled or arrived at based on information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified, is provided on an ‘as is’ basis and no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, reliability, merchantability or fitness for a particular purpose of such information and opinions, except with respect to information concerning Renaissance Capital, its subsidiaries and affiliates. All statements of opinion and all projections, forecasts, or statements relating to expectations regarding future events or the possible future performance of investments represent Renaissance Capital’s own assessment and interpretation of information available to them currently.
The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors and trading in these instruments is considered risky. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. Some investments may not be readily realisable since the market in the securities is illiquid or there is no secondary market for the investor’s interest and therefore valuing the investment and identifying the risk to which the investor is exposed may be difficult to quantify. Investments in illiquid securities involve a high degree of risk and are suitable only for sophisticated investors who can tolerate such risk and do not require an investment easily and quickly converted into cash. Foreign-currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or the price of, or income derived from, the investment. Other risk factors affecting the price, value or income of an investment include but are not necessarily limited to political risks, economic risks, credit risks, and market risks. Investing in emerging markets such as Russia, other CIS, African or Asian countries and emerging markets securities involves a high degree of risk and investors should perform their own due diligence before investing.
Excluding significant beneficial ownership of securities where Renaissance Capital has expressed a commitment to provide continuous coverage in relation to an issuer or an issuer’s securities, Renaissance Capital and its affiliates, their directors, representatives, employees (excluding the US broker-dealer unless specifically disclosed), or clients may have or have had interests in the securities of issuers described in the Investment Research or long or short positions in any of the securities mentioned in the Investment Research or other related financial instruments at any time and may make a purchase and/or sale, or offer to make a purchase and/or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case as principals or as agents. Where Renaissance Capital has not expressed a commitment to provide continuous coverage in relation to an issuer or an issuer’s securities, Renaissance Capital and its affiliates (excluding the US broker-dealer unless specifically disclosed) may act or have acted as market maker in the securities or other financial instruments described in the Investment Research, or in securities underlying or related to such securities. Employees of Renaissance Capital or its affiliates may serve or have served as officers or directors of the relevant companies. Renaissance Capital and its affiliates may have or have had a relationship with or provide or have provided investment banking, capital markets, advisory, investment management, and/or other financial services to the relevant companies, and have established and maintain information barriers, such as ‘Chinese Walls’, to control the flow of information contained in one or more areas of Renaissance Capital, into other areas, units, groups or affiliates of the Firm.
The information herein is not intended for distribution to the public and may not be reproduced, redistributed
or published, in whole or in part, for any purpose without the written permission of Renaissance Capital, and neither Renaissance Capital nor any of its affiliates accepts any liability whatsoever for the actions of third parties in this respect. This information may not be used to create any financial instruments or products or any indices. Neither Renaissance Capital and its affiliates, nor their directors, representatives, or employees accept any liability for any direct or consequential loss or damage arising out of the use of all or any part of the information herein
Bermuda: Neither the Bermuda Monetary Authority nor the Registrar of Companies of Bermuda has
approved the contents of this document and any statement to the contrary, express or otherwise, would constitute a material misstatement and an offence.
EEA States: Distributed by Renaissance Securities (Cyprus) Limited, regulated by Cyprus Securities and
Exchange Commission, or Renaissance Capital Limited, member of the London Stock Exchange and regulated in the UK by the Financial Conduct Authority (“FCA”) in relation to designated investment business (as detailed in the FCA rules).
Cyprus: Except as otherwise specified herein the information herein is not intended for, and should not be
relied upon by, retail clients of Renaissance Securities (Cyprus) Limited. The Cyprus Securities and Exchange Commission Investor Compensation Fund is available where Renaissance Securities (Cyprus) Limited is unable to meet its liabilities to its retail clients, as specified in the Customer Documents Pack.
UAE: Approved for distribution in the Dubai International Financial Centre by Renaissance Capital (Dubai)
Ltd which is regulated by the Dubai Financial Services Authority (“DFSA”). Material is intended only for persons who meet the criteria for Professional Clients under the Rules of the DFSA and no other person should act upon it.
United Kingdom: Approved and distributed by Renaissance Capital Limited only to persons who are eligible
counterparties or professional clients (as detailed in the FCA Rules). The information herein does not apply to, and should not be relied upon by, retail clients; neither the FCA’s protection rules nor compensation scheme may be applied.
Kenya: Distributed by Renaissance Capital (Kenya) Limited, regulated by the Capital Markets Authority.
Nigeria: Distributed by RenCap Securities (Nigeria) Limited, authorised dealing member of The Nigerian
Stock Exchange, or Renaissance Securities (Nigeria) Limited, entities regulated by the Securities and Exchange Commission.
Russia: Distributed by Renaissance Broker Limited or Renaissance Online Limited, entities regulated by the
Bank of Russia.
South Africa: Distributed by Rencap Securities (Proprietary) Limited, an authorised Financial Services
Provider and member of the JSE Limited. The information contained herein is intended for Institutional investors only.
Turkey: Distributed by Renaissance Capital Menkul Degerler A.S. - Warning Note Published Pursuant to the
“Communiqué on Principles Regarding Investment Services, Activities and Ancillary Services” by the Capital Markets Board: “The investment information, comments and advices given herein are not part of investment advisory activity. Investment advisory services are provided by authorized institutions to persons and entities privately by considering their risk and return preferences. Whereas the comments and advices included herein are of general nature. Therefore, they may not fit to your financial situation and risk and return preferences. For this reason, making an investment decision only by relying on the information given herein may not give rise to results that fit your expectations.”
United States: Distributed in the United States by RenCap Securities, Inc., member of FINRA and SIPC, or by a non-US subsidiary or affiliate of Renaissance Financial Holdings Limited that is not registered as a US broker-dealer (a "non-US affiliate"), to major US institutional investors only. RenCap Securities, Inc. accepts responsibility for the content of a research report prepared by another non-US affiliate when distributed to US persons by RenCap Securities, Inc. Although it has accepted responsibility for the content of this research report when distributed to US investors, RenCap Securities, Inc. did not contribute to the preparation of this report and the analysts authoring this are not employed by, and are not associated persons of, RenCap Securities, Inc. Among other things, this means that the entity issuing this report and the analysts authoring this report are not subject to all the disclosures and other US regulatory requirements to which RenCap Securities, Inc. and its employees and associated persons are subject. Any US person receiving this report who wishes to effect transactions in any securities referred to herein should contact RenCap Securities, Inc., not its non-US affiliate. RenCap Securities, Inc. is a subsidiary of Renaissance Financial Holdings Limited and forms a part of a group of companies operating outside of the United States as "Renaissance Capital." Contact: RenCap Securities, Inc., 780 Third Avenue, 20th Floor, New York, New York 10017, Telephone: +1 (212) 824-1099.
Other distribution: The distribution of this document in other jurisdictions may be restricted by law and
persons into whose possession this document comes should inform themselves about, and observe, any such restriction.
Additional information (including information about the RenCap-NES Leading GDP Indicator) and supporting documentation is available upon request.
Renaissance Capital equity research disclosures (SA stocks)
top related