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Economics and Markets

Emerging Markets Already Presenting Opportunities Despite Fear of Second Wave of Outflows

The asset class continues to see significant outflows as a flight to safety escalates, with the vast monetary and fiscal stimulus programmes announced by global governments in recent weeks failing to convince markets of brighter near-term prospects. But investment opportunities may become more pronounced sooner than people think, investors say.

3 Apr 2020

Bips & Pieces Economics and Markets Coronavirus

China PMI Shifts Above 50 as Domestic Demand Recovers

China's manufacturing PMI and non-manufacturing PMI moved above 50 in March, according to the official state data, an important sign of improving domestic production and consumption, despite continued pressures on the economy.

31 Mar 2020

China’s Banking System Part of the Problem, Not a Solution, to Current Crisis – Rhodium Group

As the epicentre of the coronavirus outbreak, China was the first to suffer its devastating impact as the country went into lockdown and its economy ground to a halt. But will China be able to launch a sustained bounceback, as it did after the 2008 financial crisis? According to Logan Wright, Director and Daniel Hosen, Partner at Rhodium Group, China no longer has the option of launching a…

31 Mar 2020

As Monetary Policy Reaches its Limits, Where Do Policymakers Go Next?

While the magnitude of the challenge facing monetary policy makers has escalated swiftly in recent weeks, the underlying setting – growth driven largely by cheap money, and overreliance on low rates – has been in place for some time, and many market observers have been asking the painful but necessary question: once central banks hit a wall of zero rates, where do we go from there?

31 Mar 2020

Policy Measures to Soften the Blow for Latin America as Pandemic Enters New Phase - Scotiabank

So far, data on the spread of COVID19 in Latin America suggests the worst is yet to come, and the full economic impact on growth will be significant. But the measures already taken – and those being prepared – by governments in the region should soften the blow, a Scotiabank report suggests.

30 Mar 2020

EM Telecoms During the Crisis: A Different Kind of Going Viral

When most other sectors face an unprecedented crisis, the telecoms industry could stand to benefit as demand for digital communciations soars on the back of requirements for self-isolation and quarantines across most of the world's nations, argues Manulife's Richard Segal, but the ability of telecoms to prosper in challenging times varies significantly from market to market.

27 Mar 2020

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

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

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

Ashmore: Assessing the EM Policy Reaction-Function in the Context of a COVID-19 Induced Recession

Ashmore's Deputy Head of Research Gustavo Medeiros assesses the policy reactions in emerging and developed world to the COVID19 pandemic and its impact on the global economy, concluding that EMs - lead by a gradual recovery in China and intra-EM trade - will regain strength and resilience as the crisis subsides.

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

UAE Bank to See Asset Quality Weaken – Fitch Ratings

The impact of the coronavirus is being felt by countries and sectors worldwide, but the UAE is particularly sensitive as key sectors like oil & gas and logistics feel the disruption more severely. For the country’s banking sector, the pandemic looks set to place additional pressure on banks’ credit profiles by reducing asset quality, according to a note from Fitch Ratings.

24 Mar 2020

Looking Past the Pandemic: Where Will the Opportunities Lie?

The advent of the COVID-19 pandemic has derailed the outlook of investors worldwide as growth and trade grind to a halt. With no clear end to the crisis in sight, many are increasingly bearish. But according to Hani Redha, Multi Asset Portfolio Manager at Pinebridge Investments, if investors look past what is likely a temporary downturn, then there are opportunities in the distance.

24 Mar 2020

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