Bips & Pieces
South Africa’s ZAR500bn Fiscal Bazooka Risks “Chasing a Growing Hole”
South African President Cyril Ramaphosa unveiled a ZAR500bn (approx. USD26.5bn) fiscal support package this week in a bid to help ease some of the economic pressures caused by the spread of COVID-19 and the lockdown designed to contain it. Analysts say South Africa, which was already in a precarious fiscal position before the lockdown began, was right to jump off the fiscal cliff – but now risks…
22 Apr 2020
Chile, Colombia Enlist Banking Sector to Help Channel Relief for Businesses and SMEs
The Andean nations are relying on banks to help disburse pandemic support packages into the wider economy – but will near-zero interest rates feed through to borrowers?
21 Apr 2020
Technical Factors See Oil Prices Diverge, Slip Into Negative Territory as Producers Approach Capacity Limits
Oil futures dropped sharply through Monday afternoon, with WTI leading the decline to close at negative USD37.60, the first time oil futures settled in negative territory.
21 Apr 2020
China Registered Negative Quarterly Growth for the First Time in 40 Years
China’s economy contracted for the first time in nearly 40 years due a coronavirus-inflicted slowdown through the first quarter of this year, although green shoots have started to emerge in March.
21 Apr 2020
IMF Debt Relief Programmes May Lead to More Defaults in Private Sector – Moody’s
This week the IMF announced plans to provide USD500mn in debt relief to some of the world’s poorest countries under its Catastrophe Containment and Relief Trust. All countries eligible for concessional financing from the World Bank are targeted by the G7’s debt service payments.
20 Apr 2020
RBI Announces New Policy Measures to Aid FIs
This week the Reserve Bank of India (RBI) announced a new set of policy measures to curb the impact of coronavirus on Indian markets. Suyash Choudhary, Portfolio Manager at IDFC Mutual Fund believes the policy measures announced “will serve to ease financial conditions at the margin.”
20 Apr 2020
EM Bond Covenants Strengthen Slightly – Moody’s
Emerging market covenant scores have improved slightly in the six months prior to 31 March, according to a recent report from Moody’s. The period saw covenant quality scores strengthen to 3.25 from 3.35 over the same period a year prior – far stronger than those seen on bonds issued in EMEA and North America, exceeding them in all categories except one.
20 Apr 2020
Foreign Investors Flock Back into Government Bonds as Russia’s Central Bank Ponders Rate Cut
Though down from the levels seen in early March, the share of foreign investors in Russian sovereign bonds stayed above 30% as juicy yields, calming global markets and a dovish outlook at the CBR attracted foreign buyers.
20 Apr 2020
OPEC Deal will Reduce Uncertainty for Saudi Arabia but Macro Will Pay a Heavy Price – Goldman Sachs
An historic deal between OPEC+ and the G20 last weekend may not be sufficient to lift oil prices materially in the near term given the scale of decline in global demand for oil, according to research from Goldman Sachs.
19 Apr 2020
Argentina: as Default Looms, Currency Depreciation, Inflation Begin to Bite
As tough negotiations with creditors over the country’s USD70bn debt pile continue, a further decline in the peso and rising food prices are adding to the ever-growing list of issues facing the country’s population.
17 Apr 2020