Economics and Markets
South Africa’s ZAR500bn Fiscal Bazooka Risks “Chasing a Growing Hole”
South African President Cyril Ramaphosa unveiled a ZAR500bn (approx. USD26.5bn) fiscal support package this week in a bid to help ease some of the economic pressures caused by the spread of COVID-19 and the lockdown designed to contain it. Analysts say South Africa, which was already in a precarious fiscal position before the lockdown began, was right to jump off the fiscal cliff – but now risks…
22 Apr 2020
China Registered Negative Quarterly Growth for the First Time in 40 Years
China’s economy contracted for the first time in nearly 40 years due a coronavirus-inflicted slowdown through the first quarter of this year, although green shoots have started to emerge in March.
21 Apr 2020
IMF Debt Relief Programmes May Lead to More Defaults in Private Sector – Moody’s
This week the IMF announced plans to provide USD500mn in debt relief to some of the world’s poorest countries under its Catastrophe Containment and Relief Trust. All countries eligible for concessional financing from the World Bank are targeted by the G7’s debt service payments.
20 Apr 2020
RBI Announces New Policy Measures to Aid FIs
This week the Reserve Bank of India (RBI) announced a new set of policy measures to curb the impact of coronavirus on Indian markets. Suyash Choudhary, Portfolio Manager at IDFC Mutual Fund believes the policy measures announced “will serve to ease financial conditions at the margin.”
20 Apr 2020
OPEC Deal will Reduce Uncertainty for Saudi Arabia but Macro Will Pay a Heavy Price – Goldman Sachs
An historic deal between OPEC+ and the G20 last weekend may not be sufficient to lift oil prices materially in the near term given the scale of decline in global demand for oil, according to research from Goldman Sachs.
19 Apr 2020
Ecuador Shows Why Investors Should Engage in ‘Consensual’ Solutions to COVID Crisis - Ashmore
Ecuador, like many EM countries, has been shaken by a toxic cocktail of coronavirus, crashing oil prices and restricted access to financial markets. But according to Jan Dehn, Head of Research at Ashmore, Ecuador’s approach to dealing with the crisis – defined by pro-active engagement with creditors – is one others in the market should learn from.
17 Apr 2020
“More to be Done” From Kenyan Government to Buoy Economy – Cytonn Investments
Kenya has so far managed to limit the spread of COVID-19, with just 184 cases and 7 deaths reported as of 10 April 2020, and the government has responded with fiscal and monetary measures to buoy the economy. According to Cytonn Investments, the government’s actions need to go further but the government remains constrained by its fiscal deficit.
16 Apr 2020
Excessive Dollarization, Concentration of Loans to State-Owned Enterprises Key Risks for Uzbek Lenders as Privatisations Loom
Concerns over excessive dollarization and a high concentration of loans to state-owned enterprises, many of which were offered at preferential rates, could weigh on Uzbekistan’s banking sector and throw privatisations into question in the face of record global market turbulence.
16 Apr 2020
Sukuk Issuance to Plummet in 2020 – S&P
A toxic cocktail of low oil prices and widespread disruption caused by the COVID-19 pandemic looks set to severely inhibit sukuk issuance in 2020, according to a recent report from S&P.
15 Apr 2020
With No Sign of Oil Prices Rising Anytime Soon, Stability in the Gulf is Likely to be Tested
As revenues slump and deficits soar, analysts are growing increasingly concerned about some of the Gulf’s more vulnerable economies.
9 Apr 2020