Morgan Stanley's Exotic Oil Play: BUY KAZAKHSTANI TENGES

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Looking for a way to play high oil, but sceptical of the whole BUY RUSSIA thing?

Morgan Stanley likes Kazakhstani Tenges:

— In CEEMEA, escalating oil prices point us towards short USD/KZT. We had also been recommending long RUB exposure (funded 50% against USD and 50% against EUR) but we have recently been stopped out due to EUR appreciation and stay on the side lines.

— We expect KZT to experience appreciation pressure due to its strong current account position, healthy growth and appreciating RUB. Inflation concerns may prompt the NBK to reduce FX intervention and reserve accumulation and partially tighten monetary policy through KZT appreciation.

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