Saturday, 2 April 2016

Rest of world - 2015 review



Ok, so time has slipped by again and I've not even bothered to post this until now. I definitely need more motivation if I am going to work on the next 5 years...Did I just get too old for all this?!
 
Anyway, here to complete the set. a mishmash of missing countries:
 
 
Russia
I expected that January would be tricky but with the leadership still having the upper hand and that
there would be dark issues in February and issues of freedoms to be addressed. In fact the period was dominated by the continued Ukraine situation and there were continued sanctions although Russia and its leaders held up reasonably well despite these and the period ended with the Minsk agreement.
 
I thought that April and May would see a change and the beginnings of more global issues which would become more prominent and create upheavals.  However, this wasn’t a particularly dramatic time although Russia did make some hardly veiled nuclear threats.
What clearly wasn’t the case was that I expected the time around May and June to be good economically with the stats being very positive by the end of July. In fact the economy contracted severely due mainly to the oil price though we must also note that the rouble was doing better than others expected as was the stock market: so the picture was perhaps more mixed than the GDP suggest.
I predicted that the  focus on leadership ( global matters) would continue from august to October. It is a key turning point in the longer term Russian   evolution. I was uncertain how to interpret what I saw saying “Perhaps it represents Russia taking a more prominent role on the global stage”. And of course I was spot on with Russia suddenly stepping up to get involved in Syria.
I expected a more mixed final months especially December and in fact the period was characterised by the events of the plane terrorist attack on 31 October, Turkey  and Russian bickering and the dramatic decline of oil in December.
Despite being a bit off in April/ May I did well overall  with the key political element identified 80%
 
Rouble
My goodness me. I might have been writing in 2013 but how unlikely did my words “ 2015 looks to be a positive year for the Rouble” look at the end of 2014!!! And yet……
I thought the mood would be positive, right from the beginning of January tempered by restrictions and perhaps rising rates but that the currency should end the first quarter higher than it started.
Well this was pretty good, after a disastrous December 2014 with rates raised to 17% January to March was better, indeed the rates had to be lowered.
I expected a new ( longer term) situation by April, possibly relating to inflation of asset values or natural resources. Now this was less accurate. Oil  recovered a little during this period but not long term and in fact the Rouble lost some ground rather than gained it.
I expected an exciting time in June and July but again I didn’t really get the direction!!
I said August would be another positive month with rates in the spotlight and this was broadly true- there were no changes in rates but there was certainly focus on stopping the trend.
I then stated that September to November wouldn’t really see a let up in any of the themes.  Trus but I did not see the roubles return to weakness.
I though that the rouble would still be attractive this would prevent too much happening value wise in December. Wrong. Although given what happened to oil in the period, one could argue that the rouble was positively flourishing only dropping to its 1 Jan lows!
Although I started well and though overall I was right in that the rouble did much better than many commentators expected I did get the direction wrong for a big chunk of the year. Better than 50/50 but not much 60%
 
Turkey
My prediction was that January and February 2015 would be similar in tone to the first part of 2014 with risks, instability and financial challenges with the financial ( currency) situation  magnified throughout the first half of this year and this was pretty much the reality with increased threat due to the Syrian crisis and ISIS coupled with a mixed impact on the economy of the falling oil price and the interest rate policy. However there were concerns over Erdogan’s growing power.
I thought March to May would be more mixed but with less clear events. There was a particularly bad day with power cuts etc on 31 March but that is too short a time frame for an event to show up in 3 month forecasts.
I thought the period of June and July would be quite positive. In fact there was pretty much no developments policy wise due to the hung parliament following June elections. Turkey did however step up its offensive;  against ISIS, allegedly although opposition thought it was also against Kurds etc.
I was very positive about August and September saying there would be a real sense of concrete achievement and a turning point being reached. I don’t think that that was correct at all.
And I also thought that there might be earthquakes, when in fact there were attacks in both Istanbul and Ankara as well as elsewhere. Right type of disruptive event; wrong deduction.
I thought that further steps forward would be taken in October to December, but this time I was more correct that there might be some serious instability- while the ISIS/Syria involvement continued, there was also dispute with Russia over military air activity.
 My one curious comment was that in November there may be an attempt to subdue some political or economic activity by the government. In fact the main party once again gained its majority and took back control that it had lost in June.  I said that balancing growth and personal freedoms may prove hard; an indicator of the divided views of Erdogans plans and crackdowns 
I also felt that debt reorganisations may be necessary; there certainly were difficulties due to the falling Lira.
Ok but not great   65%
 
Turkish Lira
For the Liar I said there would be a brief respite though as 2015 begins with many of the themes of 2014 continuing. There is still uncertainty, still volatility and still pressure on values with the situation is not as bad as before and there are signs that the balance might even be positive by the end of February. There is definite support at this level. This was a reasonable assessment – although there was a decline in February there was  some strength in the first weeks and mid Feb
I predicted March and April would “see things all over the place again” The currency fell in March and rose in April!
But then I blew it. Saying correctly that while May to August, would not bring a turnaround in sentiment there would be enough positive momentum to create a rise in value. Trash. The currency ( along with EM currencies in general ; though in this case more politically motivated than oil related) fell a lot specially in June to July.
Still I correctly saw September and October see a return to earlier conditions, and more volatility than trend as well as the fact that the  latter part of these two months would see a new environment is being created; i.e. the 1 November election.
I said that the new situation would starts to take its form in November and December but with some uncertainty surrounding how it will play out leading to more of the old instability and volatility. And again this was reasonable with a better situation from September to November giving way to a return to another patch of volatility in December.
Ok – generally correct (2015 not as bad as 2014) some good calls, but also a big error mid –year  so no more than 75%  
 
Saudi Arabia
Obviously we dealt with January last year and the success of the prediction of a new leader.
The real stories of 2015 were the general situation in the middle East and in particular in this case Yemen and the oil market.
I thought March would be relatively calm and to some extent it was but Yemen was becoming more of a problem.
I said that April to June would be quite different. I thought that there would be a return to matters pertaining to women’s position but that this was merely a taster of some major changes to the image of the country. It was around this time that the legislation confirmed the 2014 statement that women could vote in 2015. The month also had a reshuffle of  the line to the throne and the finance ministry and preparation for June’s opening up of the stock market to outsiders.
I thought that more challenges would be evident in July and August. Of course the continued issues of Yemen were a background problem as was the oil price impact.
I also noted that the women power issue would be important at this point; it was when the first women were able to register to vote in the upcoming December elections.
I thought September would see a much less stable environment, due to security and image The people start to be more split on the direction things are moving. As well as Yemen and the impact of oil which led to attempts to diversify through US investment rounds, there was a disaster at the hajj pilgrimage killing over 700 which led to criticism at home and abroad.
I leva you with my original forecast for the last quarter of the year, “[this] is the one that brings everything together and sets the tone for 2016. The position is not wholly bad – indeed there are some real opportunities now. But expect all of the following to be important: energy and oil price….. women’s position, internal leadership and by the end of the year we can expect some matters pertaining to re- securing international ties  and keeping control internally” I think that sums it all up pretty accurately,
95%
 Israel
I thought that the first two months of the year ( despite continuing background conditions) should be OKish. But that March 2015 would see more muscle flexing.  Around March Netanyahu generally managed to annoy both home ( opposition rallies) and abroad ( Washington) but won the election.
I said the  situation in April / May would be tricky. And there were two themes- the difficulty of forming a workable coalition and Israel’s continued futile attempts to prevent to US/Iran deal
I thought that the next 3 months while not reversing any broader positions would be quieter and they were.
But I said that the last three months are more mixed again. In fact there was an uptick in violence between Israel and Palestinians and Netanyahu  vowed to end this and again backtracked a bit on the election statements which reneged on the 14-state solution. There were also increasing concerns about the viability of the Palestinian Authority. What a mess
My remark about communication or information restrictions towards the year end seems mainly to relate to the rise of the Israeli cyber-security groups, although it may also relate to the closing of some lines of communication and the opening of others ( such as links with Turkey).
Good but could have been more precise 80%
 
 Iran
I said “Although 2015 starts with continued economic inertia, the signs are generally very positive indeed for the first three months.  There is potential for consolidation of position, for calming statements and for the  country to harness power  constructively. The only risk is that the government goes overboard in their enthusiasm.” There was almost a nuclear deal with the US by the end of the first quarter, but not quite.
I thought that there could  be big changes regarding women in the country by April and May, though not without opposition.
Almost two years after his 2013 election, President Hassan Rouhani and his Vice President for Women and Family Affairs, spoke up against discrimination against women this week, in the face of steadily deteriorating conditions for women in Iran.
“The government considers it its duty to take necessary action for women to enjoy and utilize social opportunities,” said Rouhani on April 12, 2015. “The government will strive so that 50% of the society does not remain unemployed, isolated, and [Iran’s] second gender,”
I then said  “June is another broadly positive month  when more change can be accomplished. But it is not without some vocal resistance however.”  The finalisation of the US deal did not come until early July but the bulk of the negotiation and hard-line grumbling was in June.
I thought July and August would be more mixed, there is some minor unsettling behaviour but nothing on a grand scale. In fact there was a sort of strange period between formal agreement and official backing and opening up where there was a lot of discussion and also anticipation.
I then said  about September-October “There is a noticeable period where hardline positions are weakened and there is possibility to start a new more open phase, perhaps particularly in religious matters.” It was October that parliamentary agreement including sufficient hardliners was gained.
Finally I predicted  “The last two months see this reflected in the ability of the leadership to get things done. However this might be experienced as hardship by the population as a whole in the short term and the advances relating to women may be undone for a while”. The reality was that the hangover from sanctions was still continuing and the ramping up of oil output was a double edged sword. Regarding women
In November it was announced that “Iranian women who fail to wear a veil when driving will have their cars impounded for a week and are likely to be fined, police in the country have warned.” And “a concert by the Tehran Symphony Orchestra was cancelled at the last minute on 29 November 2015 because some of the musicians were female,” reported The National.
But on the other hand a female ambassador was appointed. The situation continued to be mixed. 
Not perfect – but some pretty good timings and correspondences: 90%
 
 South Africa
As anticipated the themes of 2014, local strikes  and global economic ones, continued into 2015. This was so with the miners and other strikes and the impact of both the declining rand on the economic situation and the commodities slump on industry.
I anticipated themes of possible deception by March and there was increasing focus on corruption issues. I also suggested mists – although in actuality things were darker than that with electric blackouts
I expected a shift around April that would related back to 1991 – and in the April there were increasing anti- foreigner attacks which required the army to be deployed. And in May the opposition elected its 1st black leader.
I expected July and August to be better months and although there was continued economic and currency difficulties there was less noticeable conflict and it was acknowledged that despite everything the stock market was doing well.
I thought September would be a different matter with issues magnified out of proportion.  In fact it wasn’t really till October ( i.e. within the required month either side) that things became more heated as miners protested, and there were student demos causing chaos in parliament. 
I forecast October and November as mixed months but it was really December when the biggest crisis happened – when Zuma sacked the finance minister and then  backtracked on it. I was therefoe out on the timing saying the last month of the year would be unquestionably positive.
Started well – end of year timing out 60%
 
Rand
I thought that in 2015, although the structural weaknesses would remain, the volatility would be reduced.
I said there could be more support for the currency in January and February. This was true of January but not February.
I expected a series of interest rate and other actions in March and April with perhaps renewed volatility. This was not really so despite volatility in March there were renewed declines in April.
I didn’t make a clear prediction for the next few months, but on balance I suggested policy changes wile in fact the rand just continued to fall;  yet I had July  as a quiet month, when ironically it was the time of the only actual interest rate rise in the year to date.
I thought August and September looked generally positive for the currency but with much background activity ( global as mentioned elsewhere) that might be of concern; this did result in severe volatility in July to September, though there was some recovery from the latest ,July, sell off.
I said October and November would be more mixed as the conditions of the previous months together with new policies and directions started to merge. I completed underestimated the rapid fall in the currency then and even worse the huge spike downwards in December which I said would be calm.
Horrible: way less than chance 20%
 
Australia
I anticipated that 2015 would be a year when  Australia was impacted by global developments and this was correct.
I predicted that January and February would be moderately calm, but this wasn’t totally the case with a risky time for the leader Abbot in early February ; but he survived this. The economy was fragile but still growing slightly.
I expected March to see a dramatic shake up probably involving immigration flows . It was a lot less dramatic a time than I expected, although my more general comments about debt and resources were valid. And curiously there was focus on Australia’s migrant policy but not in the way I imagined; rather discussions around this period were about exporting the model to Europe.
I also speculated as to whether there might be a mining disaster  which again was incorrect. The related event being merely dramatic changes in ore prices.
I expected April and May to merely see continuation of the above and there was no real change of direction.
I also commented that the rather tricky situation for the government would continue. This did prove to be prescient as the challenges of February had not fully gone away.
I saw July and August as months where the overriding theme is one of immense power and solving problems. The timing was a bit out here with the change in PM not happening until early September, but this is within the necessary period bounds . 
I thought that September and October would see a continuation of the themes but with less potency and that the latter part of the year would see some improved outlook. This was the case with slightly better employment figures and 3rd quarter GDP despite the ongoing background issues.
Ok - but no stunning accuracies 75%