Magic Markets #117: Macro Themes with Rachel Ziemba

With a background at Roubini Global Economics and extensive experience across developed, emerging and even frontier markets, Rachel Ziemba brings a wealth of macroeconomic and geopolitical experience to Magic Markets. Having worked several times in the past with our very own Mohammed Nalla, Rachel agreed to join us for a discussion on general global trends and the perception of South Africa on the international stage. We covered topics including: Thoughts on where we are in the cycle, including global optimism around China and commodities despite some dissenting voices who think we could be heading back to a 2008/2009 scenario. The additional complexity and dynamics of global sanctions and some of the winners we have seen in this environment, like shipping companies. Where pressure points have manifested, ranging from commodities through to other players in the value chain and who the winners might be over 3 – 5 years. The importance of doing proper research into mining companies before just blindly adding them to a portfolio based on a broader commodity thesis. A note on the relative weakness of global balance sheets, as most mark-to-market moves on bonds would currently be negative. A discussion on how a push into green energy and a potential decrease in other energy prices could affect the “petrodollar” structure globally. Central bank policy and the need to “fail safely” or keep rising rates until something breaks. Commentary around geopolitical strategies of certain countries linked to the war in Ukraine and the behaviour of various countries in the east, not least of all China. Global perceptions of South Africa and how we have benefitted from a deterioration in some of our peer countries that have become “uninvestable” – like Russia. How our greylisting is seen by global banks, both practically and in terms of sentiment towards South Africa. For those looking to understand the music that is playing on the stock-picking dancefloor, an appreciation for macroeconomics and geopolitics is key. This episode is a great way to learn about some of the key themes and complexities. You can follow Rachel on Twitter for more insights and you can follow her work on her website.