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Economics and Markets

Ashmore Group: When Market Valuations Become Too High to Fall

It cannot have escaped investors’ attention that stock markets are surging and spreads are tightening. Yet, the world has not looked as bad as this in political and economic terms for a very long time. Asset prices seem divorced from fundamental realities. How and why does this happen and what does it mean for investment? This short note aims to provide a brief perspective on these questions.

9 Jun 2020

Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead

Risk-on was the theme last week and that is likely to continue this week. That’s good news for EM, which has benefited from improved market sentiment. Commodity prices continue to recover, even though the data out of mainland China remain mixed. The Fed is expected to reaffirm its current policy stance when the FOMC meets this week.

8 Jun 2020

Retail, Institutional Investors Head in Opposite Directions on EM Debt

Net fund flows into emerging market debt were flat for the week ending May 27, with investors continuing to favour hard currency debt over local assets.

2 Jun 2020

Fall in SAMA’s Reserves Due to Asset Transfer to PIF – Goldman Sachs

April saw foreign exchange reserves at the Saudi Arabian Monetary Authority (SAMA) continue to fall by an additional USD24.7bn, with the total decline over March and April now totalling some USD48.7bn. This was largely due to a liquidity injection into the Public Investment Fund (PIF).

2 Jun 2020

Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead

EM FX had a solid week, helped by overall weakness in the dollar. Trump’s threats against China turned out to be much ado about nothing and so risk assets ended the week on a strong note. This week, markets will be looking for some sort of response from China but quite honestly, Trump did so little that we may not see anything beyond some snarky Tweets from the Global Times. For now, the…

1 Jun 2020

GCC Debt Sees Strong Demand in Q2 But Worsening Outlook Raises Alarms

GCC sovereign bond issuance surged to USD26bn and attracted more than USD140bn in demand through the second quarter of this year as the region’s governments flocked to international markets to cover deficits sent wider by lower oil prices and depressed economic activity. Some analysts say investors should not be so quick to shrug off some of the macroeconomic pressures weighing on the region.

29 May 2020

External Financing Risks to Turkish Banking Sector ‘Manageable’ - ING

As Turkey braces for the economic impact of the COVID-19 crisis, the banking sector looks likely to be called to play a larger role in facilitating the government’s stimulus plans. But despite a recent spike in NPLs and foreign exchange pressures, the risks to the country’s banks appear manageable, according to a recent report by Oleksiy Soroka, Senior High Yield Credit Strategist at ING.

22 May 2020

Moody's: G20 Debt Suspension Will Only Marginally Ease Pressures on EM Economies

The decision to suspect debt payment on debt to some of the world’s poorest economies will only marginally ease pressures on financing, according to a recent report from Moody’s Investors Service.

22 May 2020

Sri Lanka’s Central Bank Says the Government Can and Will Pay its Bills, but Investors Aren’t as Certain

The Sri Lankan government has gone on the defensive to counter market speculation about whether unaffordable debt levels and a rapid erosion of its economic fundamentals in the wake of the COVID-19 pandemic will lead to a default.

21 May 2020

Scotiabank Says Brazil’s Lessez-Fair Lockdown Could Bring Long-Term Pain for Short-Term Gain

As Brazilian retail sales surprise on the upside, analysts at Scotiabank warn that lack of a clear policy and lessez-fair domestic lockdown could lead to a long and difficult recession down the road.

20 May 2020

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