Currencies
Bonds Rally despite India’s “Inconvenient” Currency Ban
Millions of people are still queuing up at Indian banks to exchange their now worthless 500 and 1000 rupee notes one weak after Prime Minister Modi surprised markets with a controversial ban on large-denomination notes. Nevertheless, the country’s local debt market has been one of top global performers in the days since the ban was imposed.
16 Nov 2016
Free-Floating Egyptian Pound Settles as Stocks Rally
The Egyptian pound began to show signs of recovery a week after the Central Bank’s decision to float the currency - a key condition set by the IMF for its US$12bn loan. But as popular protests engulf parts of the country, the government must weigh up the risks of carrying out fiscal reforms against growing popular discontent.
11 Nov 2016
Rising Capital Outflows in China Threaten Snowball Effect
The world’s second largest economy continues to haemorrhage cash amid investor concerns that a planned currency devaluation could escape the control of the authorities.
11 Nov 2016
Donald Trump Presidential Win Broadly Negative for Emerging Markets
Donald Trump will be the next President of the US. Certain emerging market currencies have reacted badly to his victory and the expected trade wars that will follow, and investments are likely to suffer if the president-elect acts in office similarly to the campaign. However, other EMs are set to be more affected by Trump’s foreign policy views.
10 Nov 2016
South African Fundamentals Boost to Credit Despite Expected Downgrade
South Africa’s expected downgrade is unlikely to significantly rock the markets as they are likely to have pre-empted the rating agencies’ decision, factoring in a likely downgrade. Nevertheless, there will be some short-term volatility, but relatively strong fundamentals, low liabilities and a tentatively improving rand mean that the country’s debt could be a worthwhile buy when the downgrade…
9 Nov 2016
Russian Bank Purge Deemed a Success, But the Sector Remains Overcrowded
Over the last three years Russia’s Central Bank went on a delicensing spree, shutting down hundreds of small and medium-sized banks. Although the sector is now looking healthier, it remains overcrowded, according to experts.
7 Nov 2016
Sub-Saharan Africa Not in Debt Crisis… Yet
Sub-Saharan Africa (SSA) is not yet facing a debt crisis, and issuing debt is the only way for the economies of the region to fund their existing debt and finance their budget deficits. However, prudent use of funds is necessary to maintain credibility otherwise Eurobond funding is likely to dry up, the cost of which local and concessional borrowing alone will not be able to cover.
2 Nov 2016
Lull hits MILA debt offerings as markets assess global risks
Chile’s proposed return to the international debt markets and Mexico’s recent euro-denominated trade mark a rare sign of activity in the MILA region over the past few months. What is causing the slowdown?
26 Oct 2016
Nigeria’s FX policy deters investors, may lead to corruption
Foreign investment to Nigeria remains stagnant as the country’s FX problem persists despite a partial devaluation of the naira. Although the country has the reserves to partially prop up the naira at the official rate for some time, in the long-run the system is unsustainable, while the mismatch between the parallel and official rates presents too many opportunities for corruption.
26 Oct 2016
Kenya’s Treasury exploring potential yen, yuan borrowing
The Kenyan government may look to tap the yen and yuan markets to enable to country to access new pools of investors. Although China is likely to remain the dominant lender to the country, its relatively strong fundamentals versus its peers mean it will likely be one of the more preferred investment destinations across Africa for investors globally.
19 Oct 2016