Civil unrest can test emerging markets, Mobius says

Civil unrest biggest threat to emerging markets (Financial Times): Civil unrest could be one of the biggest risks facing the emerging markets sector in the next 12 months, according to Franklin Templeton’s Mark Mobius.

He said Brazil, China and Turkey were very attractive markets in the current environment, as these economies stood to gain from monetary changes. “In Turkey, exports have been impacted by what’s happened in Europe, but they have quite a vibrant domestic economy and tourism,” he explained. “The key factor is the global decline in inflation and interest rates – Turkey has suffered from high interest rates in the past,” he said.  “This decline is very good news for Turkey, which is one of the reasons why we’re pretty bullish.”


Pemex Oil Output Declines at Fastest Rate Since World War II(Bloomberg): Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Brazil Stocks Drop on Economic Growth Concerns; Bolsa Tumbles (Bloomberg): Brazilian stocks dropped the most in a week, wiping out this year’s gains, as materials companies and banks slid on concern a global economic slowdown is worsening.


Russia’s Debt Rating Cut by S&P on Outflows, Reserves (Bloomberg): Russia’s long-term debt rating was lowered for the first time in nine years by Standard & Poor’s, which cited capital outflows and the “rapid depletion” of the foreign currency reserves.

Brazil Real Falls as Inflation, Trade Reports Fuel Rate-Cut Bet (Bloomberg): Brazil’s real declined, extending a four-month slide, as an inflation gauge slowed more than expected last month and the country posted its biggest weekly trade deficit in three months, the latest evidence the economy is faltering amid a rout in commodities.

Latvia’s IMF Bailout Plan Maintains Currency Peg, Trading Band (Bloomberg): Latvia’s International Monetary Fund- led bailout package will involve loans from other European governments and will maintain the country’s currency peg to the euro, the IMF said.