Tellimer provides an integrated suite of services focused on the world's developing markets. It offers world class investment research and local insights; end-to-end content distribution and analytics; market execution and corporate access; brokerage services across Fixed Income and Equities; and expert advisory services.

Tellimer is headquartered in London, UK, with additional offices in Dubai, Lagos, Nairobi, New York and Singapore. It is a division of Exotix Partners LLP.

Rahul Hans

DG Khan Cement: Analyst briefing takeaways

D.G. Khan Cement Co. Ltd (DGKC) held an analyst briefing session today to discuss the financial results of FY 20 and 1QFY21. Key highlights: * The utilisation level based on local sales was c.76% in FY 20 as compared to industry utilisation of 63%. Total utilisation level was c.102% in FY 20 vs. industry utilisation of 75%. * The gross margins declined by 9ppt yoy to 4.2% in FY 20. This was mainly led by (i) lower cement prices, (ii) higher discounts offered to grab more market share, (...

Kiti Pantskhava ...
  • Luke Richardson
  • Patrick Curran
  • Stuart Culverhouse

Kurdistan E&P bonds lag, low EM yields, 2021 global investment themes and more

IN FOCUS: KURDISTAN E&P BONDS LAG EM AND IRAQ RECOVERY * Iraq sovereign bonds rallied after the US election, but the Kurdistan oil and gas segment was overlooked * Tensions are elevated between the KRG and the federal government as disagreements deepen over Kurdistan oil exports * We upgrade DNONO 23s to Buy; reiterate Hold on GULFKY, HKNENG, GENLLN, DNONO 24s; and downgrade SNMCN, OILFLO to Sell Read the full report here. RECAP OF THE WEEK’S KEY CREDIT RESEARCH Global Investm...

Evgeniy Kipnis

X5 Retail Group considering spin-off and IPO of its online businesses – POSITIVE

Newswires reported today that X5 (FIVE LI / FIVE RX: O/W; TP $44.9/RUB3,364) is considering the spin-off and IPO of its online food delivery businesses on a 2-3 year horizon. We believe the market currently ignores the value lying in X5’s online businesses, given its relatively small contribution to the business. We think those businesses deserve a higher contribution to X5’s market cap – 12-17% on our estimates – considering the growth profile and ongoing global race for IPOs in the e-comme...

Rahul Hans

Kohat Cement: FY20 and 1QFY21 analyst briefing takeaways

Kohat Cement Company Ltd (KOHC) today conducted an analyst briefing session to discuss the financial results of FY20 and 1QFY21. KEY HIGHLIGHTS The local cement demand in FY20 declined by 1% yoy; whereas, KOHC’s local dispatches declined by 6% yoy. The company sold less than its implicit capacity share, which was part of its strategy to curtail losses given prevalent lower retention prices. However, the company sold more cement in 1QFY21 on the back of higher local retention prices, which inc...

Boris Krasnozhenov ...
  • Yulia Tolstykh

Alrosa: Light at the end of the tunnel; upgrade TP

TP upgraded from RUB76.8/share to RUB118.8/share; Overweight (O/W) maintained: ALROSA’s 3Q20 IFRS results were a long awaited relief after the major meltdown in the industry caused by the pandemic. We have updated our ALROSA model based on positive management sales and production outlook. Though pandemic risks remain, we expect sales to recover to 34 and 37 mn cts in 2021 and 2022, respectively. We forecast rough diamond sales prices to increase from $129/ct in 2020 to $135/ct in 2021 and $14...

Stuart Culverhouse

2018 Fixed Income Frontier Outlook

We cannot recall EM and frontier markets beginning a year with so much positive sentiment – we would probably need to go back to before the global financial crisis, perhaps longer still. This comes after 2017 likely saw the first positive global growth surprise in seven years, despite the onset of the withdrawal of global monetary stimulus, and we think this momentum looks set to continue into 2018.

Nirgunan Tiruchelvam

Which of the Baby Amazons will survive?

E-commerce is in the ascendancy in emerging markets, having grown by an estimated 18% per annum over the past five years.

Walid Khalid Bamhair

Saudi Arabia (NCB Capital): FTSE Russell – Saudi implementation phase

On 18 March 2019, FTSE Russell will begin the implementation of the inclusion of Saudi Arabia into the FTSE index series. Saudi Arabia is projected to have a weight of 2.9% in the FTSE Emerging All Cap index and 0.30% in the FTSE Global Equity index. Saudi’s addition to the FTSE Emerging All Cap index is expected to result in a total inflow of cSAR21.7bn mainly from passive funds benchmarked to the index. The implementation will occur in five tranches with the first tranche representing 10% of total inflows equivalent to SAR2.17bn. We expect the Saudi market to continue its positive momentum...

Duncan Wales ...
  • Tellimer Research Team

Global Themes for 2021

It has been an incredibly strange year. Last year, moving into a new decade, Tellimer brought you a list of 20 themes that we thought could shape markets throughout the 2020s. Our predictions on the impact of cheaper and more available tech have all come true faster than even we predicted, as the pandemic accelerated the adoption of digital payments and e-commerce across the globe. Covid-19 and its challenges (and, for the right tech operators, its opportunities) looms largest, but the prospe...

Stuart Culverhouse

Fiscal consolidation, but not yet

The pandemic has had a significant impact on debt around the world, as governments, corporates and banks alike borrow to cushion the impact and finance spending. In advanced countries, public debt is expected to increase by 20ppts of GDP this year compared with 2019, according to IMF WEO projections. Public debt (% of GDP) [/TnS0Kp8tNES2sUiaaITaQ8CSBPjTamiKRsMkEWrY.png] That rivals the increase seen during the global financial crisis (GFC), although that was 20ppts ove...

Patrick Curran

Yield opportunities in a world of low rates

The Covid-19 crisis and associated economic contraction have prompted a notable shift in the monetary policy outlook in developed markets, which we think will have important ramifications for emerging market assets in the coming years. In September, the Fed shifted to average inflation targeting and indicated that it expects to maintain rates at the current 0.00-0.25% level until inflation is on track to exceed its 2% inflation target “for some time.” The FOMC’s dot plot indicates that only o...

Patrick Curran

Post-Covid debt overhang drives divergence in emerging market credit

As we have previously highlighted, fiscal stimulus has totalled US$11.7tn (nearly 12% of GDP) globally through 11 September, split almost evenly between on- and off-budget spending. This is projected to push government debt globally from 83% of GDP in 2019 to 98.7% in 2020, rising by 20.2% of GDP in developed markets, 9.6% in emerging markets and 5.5% in low income developing countries (LIDCs). Covid-related fiscal impact [/9zjOCZeV9bMg52TvdKsQmw0CoCkIm4cWLND7FxAc.png]...

Stuart Culverhouse

The decline and fall of central bank independence

The theory supporting central bank independence is well known. An independent central bank addresses the time inconsistency problem faced by politicians in setting monetary policy, who – with shorter time horizons – may seek to exploit short-term trade-offs between inflation and employment (the so-called Phillips curve). Independent central banks should therefore generally lead to better inflation outcomes. This has been shown empirically – more independent central banks have lower inflation ...

Evgeniy Kipnis

X5 Retail Group considering spin-off and IPO of its online businesses – POSITIVE

Newswires reported today that X5 (FIVE LI / FIVE RX: O/W; TP $44.9/RUB3,364) is considering the spin-off and IPO of its online food delivery businesses on a 2-3 year horizon. We believe the market currently ignores the value lying in X5’s online businesses, given its relatively small contribution to the business. We think those businesses deserve a higher contribution to X5’s market cap – 12-17% on our estimates – considering the growth profile and ongoing global race for IPOs in the e-comme...

Evgeniy Kipnis

X5: Key takeaways from Pyaterochka CEO interview – moderately positive

X5 (FIVE LI / FIVE RX: O/W; TP $44.9/RUB3,364) CEO of proximity stores division, Pyaterochka, Sergey Goncharov, gave an interview to TASS this week. He provided supportive comments on the Q4 trends, expecting LfL sales growth to accelerate and EBITDA margin to expand y/y. Online business is showing solid results and is close to breakeven. Besides, the company is actively developing its digital formats and solutions, thus, the most digitalised food retailer in Russia. Overall, the news support...

Hasnain Malik

Africa equities should catch LatAm peers, Egypt top pick

Africa's equity markets have trailed global peers in the recent rally probably because of low levels of trading liquidity rather than poorer fundamentals. This should mean that they should catch up after a lag. Indeed, it is no accident that the most liquidly traded African market, South Africa, has been the continent's outperformer in the global risk-on rally. Africa is no less geared to the bump in commodity export prices and no less chequered in terms of sluggish reform and accumulation of...

Tanay Roy

Stock dividend adjustment for SQUARE and BXPHAR

SQUARE and BXPHAR declared 5% and 10% stock dividends respectively for FY20. Square's record date was on 22nd November 2020 and BXPHAR's record date is on 25th November 2020. SQUARE's post-record date TP stands at BDT255, after adjusting for the 5% stock dividend. The TP implies 15.0x FY21 P/E based on stock-dividend adjusted EPS of BDT17.0. BXPHAR's post-record date TP stands at BDT136, after adjusting for the 10% stock dividend. The TP implies 14.5x FY21 P/E based on stock-dividend adjusted...

Anna Kurbatova

HeadHunter acquires Zarplata.ru for RUB3.5bn – Positive

HeadHunter (HHR US: E/W, $20.7 TP) announced it has entered an agreement to acquire 100% of online recruitment operating platform LLC Zarplata.ru from Hearst Shkulev Digital Regional Network B.V. Zarplata is a firm 2nd tier player focused on the blue-collar segment in Siberia and the Urals. The deal is expected to strengthen HH’s regional presence as well as its position in the blue collar and SME segments, which is in line with the company’s strategic goals. Zarplata is likely to add 10% to ...

Rahul Hans

DG Khan Cement: Analyst briefing takeaways

D.G. Khan Cement Co. Ltd (DGKC) held an analyst briefing session today to discuss the financial results of FY 20 and 1QFY21. Key highlights: * The utilisation level based on local sales was c.76% in FY 20 as compared to industry utilisation of 63%. Total utilisation level was c.102% in FY 20 vs. industry utilisation of 75%. * The gross margins declined by 9ppt yoy to 4.2% in FY 20. This was mainly led by (i) lower cement prices, (ii) higher discounts offered to grab more market share, (...

Rahul Hans

Kohat Cement: FY20 and 1QFY21 analyst briefing takeaways

Kohat Cement Company Ltd (KOHC) today conducted an analyst briefing session to discuss the financial results of FY20 and 1QFY21. KEY HIGHLIGHTS The local cement demand in FY20 declined by 1% yoy; whereas, KOHC’s local dispatches declined by 6% yoy. The company sold less than its implicit capacity share, which was part of its strategy to curtail losses given prevalent lower retention prices. However, the company sold more cement in 1QFY21 on the back of higher local retention prices, which inc...

Boris Krasnozhenov ...
  • Yulia Tolstykh

Alrosa: Light at the end of the tunnel; upgrade TP

TP upgraded from RUB76.8/share to RUB118.8/share; Overweight (O/W) maintained: ALROSA’s 3Q20 IFRS results were a long awaited relief after the major meltdown in the industry caused by the pandemic. We have updated our ALROSA model based on positive management sales and production outlook. Though pandemic risks remain, we expect sales to recover to 34 and 37 mn cts in 2021 and 2022, respectively. We forecast rough diamond sales prices to increase from $129/ct in 2020 to $135/ct in 2021 and $14...

Omar Attia

MFPC: 3Q20 Revenue Weakened by Prices, Margins Advance Though

Sales dip quarterly; hindered by currency and Urea pricing MFPC released its consolidated financials for 3Q20. Sales recorded EGP1,712 million (-12% QoQ, -7%YoY). As remarked, the dip in sales can be mainly attributed to the two usual suspects, the exchange rate and international urea pricing. The former oversaw a 4%YoY appreciation, while the latter witnessed a c. 11.5% YoY decline. We remind you that MFPC exports more than 80% of its output. Cost efficiencies help lift margins Gross profit ...

Abdul Ghani Mianoor

Nishat Mills: FY 20 corporate briefing takeaways

Nishat Mills Limited (NML) posted FY20 unconsolidated NPAT of PKR3.5bn (EPS: PKR9.97), down 40% yoy from a NPAT of PKR5.9bn (EPS: PKR16.66). The decline in profitability was largely attributed to the global Covid-19 lockdowns, which resulted in dismal exports during 4QFY20. Gross margins in FY20 remained flattish yoy at 12%. During 1QFY21, NML posted an unconsolidated NPAT of PKR946mn (EPS: PKR2.69), flat yoy. Key highlights * NML reported net sales of PKR60.9bn in FY20, down 4% yoy, which w...

Stuart Culverhouse

Argentina: No easy option to avoid another (currency) crisis

The Argentinian Peso (ARS) fell to 61/US$ in early trading (down 26% from Friday's close), but has since recovered a bit to 55. It looks like the authorities have not intervened too much this morning, by letting the currency fall as far as it has. Why resist that pressure? But it is a difficult, if not impossible, job for them now. The central bank has some ammunition, but probably not enough if it keeps on like this.

Kiti Pantskhava ...
  • Luke Richardson
  • Patrick Curran
  • Stuart Culverhouse

Kurdistan E&P bonds lag, low EM yields, 2021 global investment themes and more

IN FOCUS: KURDISTAN E&P BONDS LAG EM AND IRAQ RECOVERY * Iraq sovereign bonds rallied after the US election, but the Kurdistan oil and gas segment was overlooked * Tensions are elevated between the KRG and the federal government as disagreements deepen over Kurdistan oil exports * We upgrade DNONO 23s to Buy; reiterate Hold on GULFKY, HKNENG, GENLLN, DNONO 24s; and downgrade SNMCN, OILFLO to Sell Read the full report here. RECAP OF THE WEEK’S KEY CREDIT RESEARCH Global Investm...

Lakshini Fernando

Sri Lanka: Rates remain unchanged; CB takes steps to accelerate lending

The Central Bank (CB) maintained key policy rates at the current level, following its monetary policy meeting yesterday. This came amidst our view of the CB having room to further reduce rates. However, the CB introduced a 7.00% lending cap on mortgage backed housing loans for the first 5-years which will help boost housing loan demand. Furthermore, the CB plans on introducing lending targets for selected sectors in the near further to help boost economic growth. SDFR currently stands at 4.50...

Stuart Culverhouse

Emerging market yields reach all-time low

Nominal EM yields reached an all-time low of 4.34% on Friday on our calculations (EM US$ sovereign yield defined as EMBI spread plus US 10-year bond yield). This surpassed the previous series low on 3 January 2013 of 4.37%. The yield has come down c40bps since end-October, buoyed by Joe Biden's victory in the US presidential election and positive news on Covid vaccines; although, if truth be told, we were near historical lows in August (4.38%) and have averaged c4.5% over August-October, maki...

Patrick Curran

Kenya seeks IMF funding and possible debt relief

Kenyan eurobonds have outperformed in recent months, which we find little justification for given deteriorating debt dynamics. However, over the past week, it has emerged that Kenya is in talks over an IMF program and is considering a request for debt service relief under the G20’s debt service suspension initiative (DSSI) without any associated private sector involvement (PSI). In our view, this is unambiguously credit-positive, and retroactively justifies Kenya’s recent outperformance. We r...

Elizaveta Naumova

Alfa Fixed Income Weekly: State of the world

Hopes for vaccines pushed oil prices above $45/bbl (Brent). Investors continue to assess the possibility of quick vaccination and return to normality. IG and HY dollar spreads narrowed by 5 and 11bp, respectively, continuing to narrow further to the lows of January. Risk-on mode and plenty of liquidity are being reflected in the continuous strong volume of placements in all segments – during last week, HY dollar papers demonstrated the highest volume of placements in two months. Ruble debt We...

Lakshini Fernando

Sri Lanka (Asia Securities): New president appoints interim cabinet; positive for policy direction

Sri Lanka’s newly-elected President Gotabaya Rajapaksa appointed an interim caretaker cabinet consisting of 16 members today. This followed his appointment of ex-President Mahinda Rajapaksa as the prime minister. In addition to his post as PM, Mahinda Rajapaksa was sworn in as 1) Minister of Finance, 2) Economic affairs and policy development, 3) Buddhist affairs, 4) Cultural, 5) water supply and urban development, and 6) housing development. We believe the smooth transfer of power from the previous UNP administration is a key positive to establish stability soon after the presidential elect...

Takudzwa Sherekete

Zimbabwe (IH Securities): Strategy – economic headwinds to persist

The 2020 Budget attempts to solve the underlying problem of productivity through several measures, the main lever of which is the increase in tax-free thresholds to release more disposable income from consumers. Our concern is that prevailing economic headwinds including elevated inflation will in the short term continue to outpace consumer earnings especially as corporate employers remain under significant pressure.

Muhammad Saad Ali ...
  • Raza Jafri

Pakistan (IMS): Market Strategy – a U-shaped recovery

We recently met with a group of key government officials and major corporates in Pakistan. Most companies retain a cautious outlook on volumes (over the next 12-18 months), but acknowledge the macro improvement and bottoming out of corporate profitability. The ongoing protests in Islamabad were given short shrift.

Sandy Eskaros

Egypt (Pharos): Inflation Monitor – October inflation hits record low

Inflation in October 2019 fell to its lowest level since January 2007; hitting 2.4% YoY for total Egypt against 4.3% in September, enforcing the single digit inflation trend further and faster than expected, as it has been decelerating further every month since May 2019. Annually, the highest growing category was Education, growing at 28.5% YoY followed by Recreation & Culture as well as Transportation, both growing at 15.7% YoY in October. Worthy of attention is the Food & Beverages category recording a decline for the second consecutive month at -6.3% YoY in October compared to -0.06% YoY i...

Kavinda Perera ...
  • Lakshini Fernando

Sri Lanka (Asia Securities): Voting for a change, but which way?

The 2019 elections will see 15.8mn voters (including 1mn new voters) polling to elect the 8th President of Sri Lanka. Overall, we note the election will be a closely contested and 1) events in the last week before the elections could shift the floating voter base, 2) higher voter participation in North and East will be critical for Sajith and 3) Gotabaya needs to attract ~68% of the ethnic majority – Sinhala voter base for a win.

Alfa Equity Team

Alfa Morning Bulletin: 26 November 2020

Russia continued its advance as global markets consolidated: Despite the cool off in global sentiment after Tuesday’s record session, yesterday Russian stocks continued to tick higher – RTSI (+1.2% @ 1,302) and IMOEX (+1.2% @ 3,134) – albeit stock-wise the gains were more concentrated. Oil prices provided a tailwind (Brent +1.0% @ 48.34) with crude continuing to climb, supported by a surprise drawdown of 754k barrels in US crude inventories last week. The ruble (-0.5% @ 75.82) trended lower a...

Alfa Equity Team

Alfa Morning Bulletin: 25 November 2020

Markets rally on US political transition and vaccine developments: Global stocks jumped strongly on Tuesday after Donald Trump gave the green light for Joe Biden’s transition to the White House and on continuous progress on the vaccine front. Russian equities rallied robustly – RTSI (+2.4% @ 1,287) and IMOEX (+1.6% @ 3,095) – led by oil & gas stocks and supported by a stronger ruble (+0.9% 75.48), which returned to a two-month high. Ozon starts trading: Ozon started trading on the IMOEX and ...

Alfa Equity Team

Alfa Morning Bulletin: 24 November 2020

Russian stock rally lost steam near the bell: The rally in Russian stocks lost steam yesterday, paring strong opening gains to dip into negative territory ahead of the close – RTSI (-0.5% @ 1,256) and IMOEX (-0.1% @ 3,047). The trend was largely in line with European markets (StoxxEuro600 -0.2%). The rotation into cyclical stocks remained solid, with oil & gas names leading the charge. The ruble remained solid but also pared gains in the evening (+0.03% @ 76.17). Oil prices remained strong an...

Alfa Equity Team

Alfa Morning Bulletin: 23 November 2020

Russian stocks consolidated gains for the week on Friday: The Russian market consolidated on Friday closing the session sideways – RTSI (+0.3% @ 1,263) and IMOEX (+0.1% @ 3,051) – rounding off the week with solid gains. The ruble pulled back slightly on Friday (-0.2% @ 76.20) but closed the week with a 1.2% gain. (Brent +1.1% @ 42.21). Oil prices closed Friday with growth (Brent +1.7% @ 44.96), advancing 5.5% for the week.

Alfa Equity Team

Alfa Morning Bulletin: 20 November 2020

The Russian stock market dove down in the sell-off on Thursday, with a few bright spots here and there shining green on corporate matters: RTSI (-1.40% @ 1.258); IMOEX (-1.11% @ 3,046). Stock performance reflected bets on later than expected recovery of global economies post antivirus lockdowns. Brent stabilized in $44-44.5 /bbl range (-0.03% @ 44.20). Troubled with a negative EIA outlook and further demand concerns, oil market moved sideways, underperforming the market. As a result, state oi...

Olabisi Ayodeji

Nigeria Tier 1 Banks: Looking to the rest of Africa for growth

The ‘rest-of-Africa’ segment is making a rising contribution to the group-level growth and profitability of Tier 1 Nigeria banks. We think this should serve as a medium-term tailwind considering challenges in Nigeria. Our top pick on this theme is Zenith, and Nigeria Tier 1 banks generally are at an attractive discount to Africa peers.

Frontier Themes: Affordability in Africa

The rise of the African consumer continues to present a significant opportunity for local and multinational consumer companies operating in the region. However, there is growing frustration among these companies over whether this opportunity will be realised, given disappointing sales growth in the region in recent years. We argue that the challenges and underwhelming performance of most of these companies is not because the opportunity does not exist, but because of their inability to adapt adequately to local nuances. In particular, that of consumer affordability, which essentially is the pr...

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