Market sentiment rallied last week on a lot of unsubstantiated claims by President Trump regarding China trade talks. At best, we know there is no further escalation (for now). At worst, the two sides remain far apart, and a deal is unlikely until 2020. That’s no reason to load up on EM. As long as current and planned tariffs are in effect, global growth risks will remain high and EM will…
2 Sep 2019
The South African fixed income market is at risk of neglecting governance-related issues if domestic demand for fixed income assets continues to outpace supply, according to Rand Merchant Bank’s Co-Head of the Debt Financing Group.
30 Aug 2019
The US-China trade war is extending and expanding. There is no longer any semblance of a truce, and this is unequivocally negative for EM. CNY, INR, SGD, MXN, and BRL are making new cycle lows, and many other EM currencies are likely to follow suit.
27 Aug 2019
As major Central Banks look set for more monetary easing, yield-hungry investors are once again piling into some of the more exotic sovereign bonds - and supply is growing in response.
21 Aug 2019
Last week’s dovish tilt by the ECB should have been EM-supportive. However, global trade tensions remain high despite the rebooted US-China talks in Shanghai this week and so we remain bearish on EM. China reports July PMI readings, and the first glimpse of the world’s second-largest economy in H2 are expected to show continued softness.
29 Jul 2019
It has not been an easy 12 months for Brazil’s corporate sector, which faces a multitude of challenges, both internal and external. Bolsonaro’s victory in the elections, though divisive, at least provided some reprieve from the political uncertainty that has weighed on Brazil’s markets in the run up to the vote. Still, many questions remain around the direction of policy, and the new government’s…
15 Jul 2019
In May, Kenya became the latest African sovereign to take advantage of relatively subdued global rates and tap international bond investors for fresh funding, but a closer look at debt sustainability metrics suggest the country, and some of its peers, may be slowly running out of room to borrow.
4 Jun 2019
Scores and rankings of ESG – shorthand for environment, social and governance – factors has become supremely important for investors looking to funnel capital towards more sustainable activities, often on the basis that better ESG means more sustainable cashflow generation capacity and lower overall risk. But are there limits to the linkages that can be drawn between credit performance and ESG…
22 May 2019
EM FX ended last week on a firm note on optimism that a trade deal will be reached. We think that optimism is misplaced and so look for EM weakness to resume this week. Indeed, rhetoric from both sides over the weekend suggest things will get worse before they get better.
13 May 2019