Policy & Government
Nigeria’s planned sukuk will unlock new pockets of investors
Nigeria’s Securities and Exchange Commission has announced the date for the country’s debut sukuk. Although complications in establishing a supportive legal framework have delayed its issuance, other factors such as establishing the proposed sukuk’s client base have to be addressed.
16 Aug 2016
Turkish mortgage rate cut unlikely to significantly impact bank profitability
Despite concerns that a cut in mortgage lending rates will impact the profitability of the Turkish banking sector, fears appear to be overblown. The cut will likely only apply to a small portion of banks’ loan portfolios, and the sector remains very solid. As such, not even mortgage backed bonds are likely to be affected.
15 Aug 2016
Negative rates mean large EM selloff unlikely even if Fed hikes
The markets appear to believe that the US Fed will be slow in raising interest rates in the future. Although certain EMs will suffer when a hike does occur, investors may hold on to EM fixed-income due to the increasing number of low or negative yielding bonds present across DMs.
10 Aug 2016
Cautious optimism surrounds Brazil
The investment outlook on Brazil is improving; however concerns do need to be taken into consideration, especially regarding the country’s fiscal policy.
29 Jul 2016
Selloff unlikely even if South Africa’s local debt junks
South Africa is likely to face a credit rating downgrade from one of the three main ratings agencies unless it begins to implement meaningful economic reforms. Despite concerns over its recent downgrade, the country’s local currency-denominated debt, held in significant amounts by foreign investors, would likely withstand a selloff in the event of a junk rating due to favourable index inclusion…
27 Jul 2016
Kenya’s Banking Sector in Transition
With three of Kenya’s banks in receivership and a report following a government audit of the country’s financial institutions still impending, it is becoming increasingly clear that the turbulence being experienced by the country’s banking sector is far from over. With consolidation and stiffer regulations in the offing, it is still unclear how the country’s nascent capital markets will evolve as…
26 Jul 2016
LatAm stacks up well versus other EMs
Compared to other EM regions, LatAm is likely to prove a popular investment destination. Strong fundamentals and pro-business leaders have contributed to this, but dropping commodity prices and lagging growth in China could still have a negative impact in the future.
25 Jul 2016
EM flows surge but downgrade risk persists
The week ending July 15 was the strongest week for portfolio inflows to emerging markets since the US Federal Reserve delayed quantitative easing tapering in September 2013, according to the IIF. EM investors believe we may yet continue to see strong flows as US growth continues trending higher, but EM downgrades could still throw a spanner in the works.
20 Jul 2016
Short term stability, long-term uncertainty in Turkey following coup attempt
A coup attempt in Turkey has stirred the country’s markets, sending its currency down and yields on government bonds higher. While the coup attempt was short-lived and markets seem to be calming, EM investors and analysts suggest the event could have far reaching implications for Turkish credit over the long term.
19 Jul 2016
Does Poland’s Economy Face Insider Threats From Its New Government?
Law & Justice (PiS), the Polish populist party that won last year’s November election, has caused concern over its economic policies for those with financial interests in the country. Plans for a forced re-denomination of Swiss franc mortgages alongside a recently introduced asset tax have fuelled fears over the health of its banking sector. Institutional independence is another worry, especially…
15 Jul 2016