Archive for December, 2017

Up-down-Up 3.0; Our team from the past, talking about the future

We just had our third instalment of Up-Down-Up! 🎊🎉

Now, we know what you’re thinking, “What’s an Up-Down-whatever?”. We’re glad you asked!

Up-Down-Up is Frontier’s very own Forum. It’s a platform for us to share our views and engage with our clients.

But what makes this year so special? Well, this year was the first time that our panel (Yeah, we got one of those 😎) did not consist of just members of our team … sort of. This time our panel also included several of our Alumni – what we like to call, the Frontier Mafia.

Back to the future with our Alumni panel

Chanakya Dissanayake

Our first panellist was also Frontier’s first employee – Chanakya Dissanayake. Chanakya played an instrumental role in Frontier’s early stages, back when frontier was operated out of what is now Amal’s son’s playroom. He worked with Amal on varied “consulting” mandates, completely different to what Frontier does now; in particular, helping a plantation company devise a major long-term business plan.

Following that, Chanakya joined Amba Research (what is now Moody’s Analytics Knowledge Services) and has been with them since the Colombo delivery centre’s inception in 2003. Now, he is the Country Head and a Director at Moody’s. In plain terms, that means he is currently responsible for all aspects of research delivery and client relationship management for engagements serviced out of Colombo and he also leads the investment research practice globally.

Dinike Jayamaha

Dinike returned to Sri Lanka in 2009, soon after the War ended (a year when Frontier nearly doubled in revenues) and led the Economic research of Frontier. Since then, Dinike has co-founded various non-profit micro-ventures in Ghana, Kenya, England, and Sri Lanka.

But he’s always had a passion for 3 things; family, firsts and fitness (kind of similar to Frontier’s own “life-first” philosophy). So, he set out to find a healthy, family friendly and ethically manufactured product that he could develop into an industry game-changer and a global first – and he did! He is currently the Founder/CEO of Ethical Extracts, the world’s first producer of high potency Ceylon Tea liquid extracts utilising a close-to-source supply chain model.

Shiran Fernando

Finally, one of Frontier’s most recent Alumni, Shiran Fernando spent the last 6 years at Frontier working in the Economics Team, again a period of fundamental growth and change at Frontier when revenues nearly tripled. Over the last few years, he led the Economic Research Team, holding the role of Lead Economist and Senior Product Head. Fancy designations aside, this meant that he was responsible for the growth of the team and any product development.

Shiran is now the Chief Economist at the Ceylon Chamber of Commerce and head of the Economic Intelligence Unit, providing policy level support and strategic advice to the Government to shape the national economic agenda.

But why Up-Down-Up?

The reason we decided to call our Forum Up-Down-Up was because of the economic philosophy that we follow at Frontier – something called Up-and-Down economics.

Up-and-Down economics has been described as the economics found on the nightly news or the business pages of newspapers; the economics that is pre-occupied with what latest economic numbers are up and down.

Essentially, we look at a whole host of economic variables and argue debate on where we think they’re going. We use that to try and predict where interest rates and the exchange rate will go in the future.

So, where are they going? Well, we’d love to tell you, but that’s just for our clients to know 😉.

But one thing we can tell you is that this instalment of Up-Down-Up was our best yet and we’ll keep it going for the foreseeable future!

The Global Economy in November

Global markets in November were affected by a number of noteworthy developments. The latest US Federal Reserve meeting minutes reconfirmed the high possibility of a December rate hike, while Deutsche Bank, Goldman Sachs and JPMorgan Chase have altered their forecasts to the possibility of four Fed rate hikes in 2018. In Europe, some political uncertainty has crept in again due to the failure of Germany’s Angela Merkel to form a governing coalition, opening up the possibility of fresh elections in Europe’s largest economy. In Britain, the Bank of England’s first rate hike in a decade has been followed by renewed optimism about Brexit negotiations after last week’s talks with the EU turned out to be fruitful.

Political risk continued to influence Emerging Markets during the month. Dozens of royals and high officials in Saudi Arabia were detained, which was seen as a centralization of power by Crown Prince Mohammed bin Salman, and raised concerns about the Kingdom’s internal stability. It also coincided with increased tensions between Saudi and Iran in the region. In addition, Venezuela finally defaulted on some of its debt repayments bringing into focus the need for investors to be mindful of the risk they take on. During the end November/ early December period, EM equities have sustained some loses, mainly driven by the technology and energy sectors.

In Asia, analysts have pointed to South Korea’s rate hike as the start of what could be a gradual tightening pattern by Asian central banks taking advantage of the healthy growth rates. Meanwhile, the Indian economy received a boost in the month when Moody’s upgraded India’s sovereign credit rating for the first time since 2004.

Brent oil prices stayed above the US$60 mark, with a two-year high of US$64.27 being reached on November 6th. Driving prices up were geopolitical tensions in the Middle East and optimism on an extension to the OPEC-led production limitation agreement. However, prices have moderated since early November, standing at US$61.22 on December 6th. The moderation has been due to the lack of any major market-moving geopolitical events in the Middle East and on concerns about increasing US oil output amidst higher prices.