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Economics and Markets

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

BBH: EM Preview for the Week Ahead

EM and other risk assets are likely to remain under pressure this week as the impact of the coronavirus continues to spread. Germany and Italy announced more severe restrictions on gatherings and travel. Reports that the Republican Senate-led aid bill has stalled due to Democratic resistance hasn’t helped matters, nor have increasingly dire estimates of the potential Q2 contraction for the US.

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

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

As Emerging Market Sovereign Credits Come Under Pressure, Ukraine Could Catch a Break

With conditions deteriorating across the board in the sovereign space amid the worsening COVID19 pandemic, Ukraine – which has seen surprisingly few cases so far – could come out stronger on the other end, Goldman Sachs analysis indicates.

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

Coronavirus is Turning Out to be the Great (Valuation) Leveller for Markets

The global economy may be going into meltdown mode as governments the world over struggle to contain the spread of COVID-19, with investors feeling the brunt of a global selloff that seems to have left no asset class – including emerging market debt – unscathed as economies grind to a halt. While it is still too early to fully understand the potential human, economic, and market fallout, many…

19 Mar 2020

IDFC Fund Manager: With Rate Cuts Around the Corner in India, Investors Should Avoid Panic-Selling and Aim for Quality Credits

Despite recent selloffs and growth concerns in India, investors should still find value in higher-quality credits, according to the head of fixed income at Mumbai-based IDFC Mutual Fund.

19 Mar 2020

Emerging Economies to see Boom in Off-Grid Renewables – Wood Mackenzie

Enormous strides have been made towards developing effective and affordable ways of generating power over the past decade, with technological innovation enhancing the viability of off-grid solutions. For emerging economies, a boom in off-grid energy will likely enhance access to swathes of the population, argues Wood Mackenzie. For state utilities, however, off-grid solutions could be…

18 Mar 2020

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