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Bips & Pieces

China Unlikely to See Swift Recovery Despite Industrial Activity Resuming

Tentative signs of an impending recovery as factories reopen should not overshadow the reality that COVID-19’s impact on the Chinese economy will far exceed that of SARS or the global financial crisis, IIF warns.

27 Mar 2020

Bips & Pieces Policy & Government Coronavirus

COVID-19 Could Restart US-China Trade Tensions – Control Risks

With the US likely to fall into a recession combined with widespread social disruption caused by the lockdown, Trump’s re-election this November appears uncertain. Far from soothing tensions between the US and China, the pandemic has heightened them.

27 Mar 2020

Russian Banks Come Under Pressure as Kremlin Tweaks Taxes to Support Pandemic-Hit Economy

The Russian government introduced sweeping changes to the tax regime in order to support businesses and SMEs, while seeking to secure additional revenue streams elsewhere. But while the country’s ample FX reserves should see it fare better than many EM peers, its banking sector – subject to a massive and prolonged consolidation over the past five years – is also feeling the squeeze.

27 Mar 2020

Somalia Lands IMF Funding Deal in Huge Boost to Reform Effort

The IMF has agreed to lend Somalia SDR292.4mn (approx. USD395.5mn) as part of a three-year Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) in a significant boost to the war-torn country’s reform efforts.

26 Mar 2020

World Bank Approves USD500mn Loan to Ethiopia

The World Bank has approved a USD500mn loan to Ethiopia, in order to support the government’s ‘Homegrown Reform Agenda’, underpinned by the Second Ethiopia Growth and Competitiveness Development Policy Operation (DPO).

26 Mar 2020

US Fed and Senate Double Whammy Response Lifts markets, EMs to Follow Suit

Promise of unlimited monetary stimulus and signs of a tentative USD2tn stimulus package in the US Senate offered some much-needed comfort to global markets, with EMs receiving an additional boost from their governments through promises of additional fiscal stimulus and quantitative easing.

26 Mar 2020

Kenyan Bond Yields Spike Due to Pandemic, Locust Disruption – Cytonn Investments

As the COVID-19 pandemic wracks emerging and developed economies alike, market have gone into overdrive with shares and bonds both suffering heavy sell-offs as investors flee to the safety of US dollars. Kenya’s local currency treasury bonds (TBs) and outstanding Eurobonds have been no exception to this trend.

26 Mar 2020

Dangote Cement Moves Forward with Bond Debut

One of Nigeria’s largest companies is moving forward with a debut bond issuance to help raise medium-term funding.

26 Mar 2020

Latin American Borrowers Brace for Volatility, Draw Down Credit Lines

Mexico’s Televisa and Brazil’s Vale are the latest corporates to make use of any credit available to them in what is likely to be a slew of regional and emerging market borrowers looking to shift into capital conservation mode in a turbulent market.

26 Mar 2020

Liquidity Concerns – Not Solvency – Driving Fixed-Income Pricing - Eaton Vance

As demand for dollars worldwide soars, cracks and dislocations are appearing in various markets including fixed income, which has seen a huge liquidity drain despite largely unchanged fundamentals.

25 Mar 2020

City of Tshwane Defaults on Bond – Nedbank

On 24th March, the City of Teshwane Metropolitan Municipality, a local government municipality covering Pretoria and the surrounding areas, defaulted on a ZAR5.5bn local currency medium-term note. According to Jones Gondo, Senior Credit Analyst, and Nthulleng Mphahlele, Analyst at Nedbank, it is a technical default caused by government issues.

25 Mar 2020

Emerging Market Corporate Defaults Unlikely to Reach 2008/9 Levels - Bank of Singapore

Investors concerned about a global financial crisis-style blowout in emerging market corporate spreads may be pleasantly surprised as a number of technical and fundamental factors leave the asset class in a much stronger position than was the case over a decade ago, according to Bank of Singapore analysts.

25 Mar 2020

Mexico Growth Outlook Sinks as Focus Shifts to Healthcare, Support for Most Vulnerable

The impact of the COVID-19 pandemic is expected to generate a significant GDP contraction, BBVA analysis indicates, as care and support for the most vulnerable should be given priority over immediate fiscal objectives.

25 Mar 2020

The Gambia Secures USD47.1mn in Credit from IMF

The Gambia has secured a USD47.1mn extended credit facility (ECF) from the International Monetary Fund (IMF) this week, with the proceeds from the funding going towards the development of policies to help contain the spread of COVID-19 and mitigate its economic impact.

24 Mar 2020

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