Archive for September, 2011

Commodities and Conservation in the Caspian

September 30, 2011 Comments off

Hello readers, thank you for your patience while I was away from this space for a few weeks. We continue to see quite a lot of market volatility, but of course we consider these to be times of opportunity in our ongoing hunt for attractive investments, and we have been pounding the pavement to look for bargains. Here’s a note from a recent visit.

At an oil rig on the Caspian Sea

At an oil rig on the Caspian Sea

What country is the world’s largest producer of petroleum? No, it’s not Saudi Arabia but Russia.[1] Oil and gas are important to Russia’s economy, as are a whole host of natural resources such as nickel, palladium, diamonds, etc. Because of what have been higher commodity prices, Russia’s economy is growing at a fast pace (it is projected by IMF to grow 4.3% this year),[2] interest rates have come down from their peak in 2008, unemployment is lower, foreign reserves have risen to over US$500 billion as at July 2011, and Russian equity markets have generally done well since 2008, even considering recent declines. That is why we have been to date interested in Russian oil companies. For this reason, I launched a trip to the Caspian Sea to see first-hand how oil drilling and production operations worked on an offshore oil rig.  Read more…

Categories: History

More Readers’ Questions Answered

September 7, 2011 Leave a comment

I always like hearing from you, and I thank you all for sending in questions and comments. This week, I turn my attention to questions related to emerging and frontier markets, which are a subset of emerging markets.

What is your view on Bangladesh?

– Fuad, Bangladesh

We are quite interested in Bangladesh as an important frontier market. Our team made several company visits there recently and we continue our research there. We are seeing potential and growth in the country, particularly in the banking, agriculture and export sectors. During our visit, we met with brokers, professors and investors to gain a deeper understanding of the economy and market, and we also visited companies across a number of sectors including banks, telecommunications, energy, and pharmaceuticals. For example, one of the companies we visited was a mortgage provider. The company had a diverse loan portfolio, providing loans for housing and construction as well as for home improvements. In our assessment, the company presented an interesting investment opportunity since it appeared to have high growth potential and strong asset quality.

On investing in emerging markets such as Africa, what are your views on the challenges from a structural perspective, e.g. political constraints, poverty and diseases?

 Masego, South Africa

Read more…

Categories: Perspective