Bips & Pieces
Fiscal Stimulus Seen Putting Pressure on Credit Ratings Globally – RenCap
As most of emerging and developed markets announce massive fiscal stimulus packages to compliment monetary policy easing in efforts to contain the fallout from the COVID-19 pandemic, mass credit downgrades are likely to follow, Renaissance Capital analysts warn.
24 Mar 2020
Which SSA Economies are Most Vulnerable to COVID-19?
Africa appears so far – at least according to official statistics – to have contained the spread of COVID-19, with SSA reporting fewer than 300 confirmed cases. But this does not mean the region will be able to ride out the storm and avoid the economic and health impact seen elsewhere.
24 Mar 2020
Indonesia Inks USD300mn Financial Reform Deal with World Bank
The World Bank has approved a USD300mn loan deal with Indonesia that will see the South Asian country fund financial sector reforms.
23 Mar 2020
Do Current Valuations Compensate Investors for Increased Default Risk?
As COVID-19 and the ongoing oil price spat between Riyadh and Moscow continues to wreak havoc on markets across the world, the spreads on high yield assets in both EM and DM have widened significantly. With many companies seeing their revenues take a beating at countries go into lockdown, and with many sovereigns juggling their need for fiscal stimulus with already lopsided public finances, Iain…
23 Mar 2020
Ecuador, Other Frontier Sovereigns Could Follow Lebanon as Spreads Widen
Huge capital outflows from emerging and frontier markets and surging borrowing costs have put a number of sovereigns in the “high risk” zone, but IMF support can provide some consolation.
23 Mar 2020
As Flight to Safety Escalates, Fiscal Stimulus Prospects Vary Widely Across Emerging Markets
Total spread widening for the EMBI Global Index has reached a remarkable 286bp, according to ING, more than the 241bp monthly change seen at the peak of the 2008 crisis. Fiscal injections will be required across the board, but continued access to the debt capital markets will be instrumental for countries to pursue fiscal easing to soften the blow from the economic slowdown.
20 Mar 2020
Central Bank of Kenya Likely to Cut Rates by 25-50bps – Sterling Capital
Ahead of the next Monetary Policy Committee meeting of the Central Bank of Kenya on Monday 23rd March, Sterling Capital predicts a rate cut of 25-50bps.
20 Mar 2020
Saudi Banks’ Margins Squeezed by Fed Cut – Fitch
The US Fed’s recent decision to cut interest rates by a further 50bp is placing additional pressure on the margins of Saudi Arabia’s banks, according to a recent report from Fitch Ratings. Following the lead of the Fed, the Saudi Arabian Monetary Authority (SAMA) cut its repo rate on Monday by 50bp, bringing rates in the Kingdom to an all time low of 1%. But the Kingdom’s banks will feel the…
20 Mar 2020
Downgrade of South African Sovereign Now 'Probable' – Nedbank Analysts
As the ongoing COVID-19 pandemic collides with a crash in the oil price and a broader deceleration of growth, the South Africa sovereign looks set to struggle. According to Jones Gondo, Senior Credit Analyst and Nthulleng Mphahlele, Analyst at Nedbank, the risk of the big three rating agencies downgrading South Africa has been significantly heightened.
19 Mar 2020
GCC Countries Race to Introduce Stimulus Measures to Support Economy and Boost Lending
GCC countries led by Saudi Arabia and the United Arab Emirates this week introduced a raft of stimulus measures to support businesses and the banking sector.
19 Mar 2020