CHART OF THE DAY: The Emerging Market Currency Bloodbath

January 26, 2014 Leave a comment

CHART OF THE DAY: The Emerging Market Currency Bloodbath

SAM RO

JAN. 24, 2014, 8:14 AM 3,201

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Global markets are getting rocked and traders are pointing their fingers at the emerging markets.

“Emerging Market weakness is widespread and after a long period of resilience is starting to impact credit markets,” said Morgan Stanley’s Rashique Rahman.

And there doesn’t appear to be one sudden event to blame.

“There is no single proximate cause, in our view, rather the cumulative impact of a number of events has led to a deterioration in risk sentiment,” added Rahman. “Growing concern over China’s macro trajectory and uncertainty over credit risk in China’s trust and wealth management products are probably the main drivers, but contributing factors to the spillover into other markets include Turkey’s ongoing currency volatility and political concerns, weakness of Ukrainian credit markets and the ARS devaluation.”

Rahman offered this five-day bar chart of the major emerging market currencies agains the U.S. dollar and the euro.

To the far right is the Argentine peso (ARS), which fell over 13% against the dollar on Thursday.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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