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The Daily Roundup

Singapore warns Trump over “trade war”, threatens retaliation – Mozambique unable to make next bond payment – Saudi Arabia to launch US$50bn renewable energy program – Turkish inflation could reach double digits as lira plummets – US lifts 20-year old sanctions on Sudan – JP Morgan Chase upgrades Indonesia stocks’ ratings – Russia expects 5.2% inflation in January, closing in on annual 4% target

Jan 16, 2017 // 5:56PM

MIDDLE EAST & TURKEY

Saudi Arabia will launch in coming weeks a renewable energy program that is expected to involve investment of between US$30bn and US$50bn by 2023, Saudi Energy Minister Khalid al-Falih said on Monday, quoted by Reuters. The minister said Riyadh would in start the first round of bidding for projects under the program over the next few weeks, hoping to produce 10 gigawatts of power. The Kingdom also reaffirmed its plan plans to follow up on last year’s record-breaking debut on global debt markets with an Islamic bond issue in a sale that could come as early as February. The sharia-compliant sukuk will form part of a pipeline of bond sales to finance the kingdom’s budget deficit and invest in economic diversification away from oil

Foreign investment in Egyptian treasury instruments could rise to US$10-$11bn in a year's time as economic reforms buoy investor confidence, Finance Minister Amr El Garhy said on Sunday. The Central Bank's decision in November to abandon a peg of EGP8.8 per dollar and freely float the currency, which has since halved in value, has helped revive foreign demand, although it is still far from pre-2011 levels.

Turkish inflation could reach double digits in the first quarter for the first time in almost five years after the lira's continued drop, two senior economy officials said on Monday. The lira has dropped as much as 10% since the start of 2017, battered by concern over Turkey's political and economic outlook - and doubts about whether the authorities will take decisive steps to arrest the slide.

AFRICA

Mozambique will not make payment to holders of its 2023 bond on January 18 because of its deteriorating economic and fiscal situation, the finance ministry said on Monday. The southern African nation, whose total foreign obligations are roughly equivalent to its GDP, said its financial difficulties made its ability to repay debt this year "extremely limited".

President Barack Obama has issued an executive order lifting 20-year-old economic sanctions on the Republic of Sudan, allowing US persons to perform trade and financial transactions with the country. The US placed an embargo prohibiting most transactions with Sudan in 1997. This involved export control regulations managed by the US Commerce and State Departments, and the more financial ‘Sudanese sanctions regulations’ (SSR) administered by the US Treasury’s Office of Foreign Assets Control (OFAC). The new executive order concerns the SSR part of the sanctions, with OFAC set to issue a new general licence shortly, authorising all activities that previously were prohibited under the SSR and related executive orders.

AMERICAS

Construtora Camargo Correa SA, one of Brazil's biggest engineering firms, is in talks with federal prosecutors for a new plea bargain deal linked to the country's sweeping "Operation Car Wash" corruption scandal, local press reported on Saturday. According to article, lawyers for Camargo Correa are negotiating plea deals for 40 executives, including a member of the family that controls Camargo Correa's parent, Camargo Correa SA.

ASIA

The global economy will face “disastrous consequences” if U.S. protectionist measures proposed by incoming President Donald Trump prompt trade wars, the head of Singapore’s Central Bank said. Some of the possible measures, such as rejecting a U.S.-Pacific trade deal and extra taxes on U.S. importers - “may well attract retaliatory measures,” Ravi Menon, managing director of the Monetary Authority of Singapore, warned on Monday.

India’s wholesale inflation slowed more than expected in the first full month following Prime Minister Narendra Modi’s clampdown on cash, as food prices plunged. Wholesale prices rose 3.39% in December from a year earlier, the Commerce Ministry said in a statement in New Delhi on Monday. Food costs fell 0.7% in the wholesale index and the increase in retail prices slowed to 1.4% from November’s 2% gain.

JPMorgan Chase & Co on Monday upgraded its call for Indonesian stocks to "neutral" from "underweight", partially reversing a move it made in November. Earlier this year the Indonesian government cut its business ties with JPMorgan after the U.S. bank downgraded its investment recommendation on Indonesian stocks to "underweight" from "overweight" in a November research note.

Indonesian companies are turning to the local debt market to refinance dollar debt in a bid to limit the impact of currency volatility and capitalise on growing domestic demand for bonds. Possible issuers include manufacturer Japfa Comfeed, tyre-maker Gajah Tunggal and Chandra Asri Petrochemical.

RUSSIA, CIS & EUROPE

Russia's annual inflation will stay between 5% and 5.2% in January, the economy ministry said on Monday. Consumer prices are set to grow by 0.6-0.8% month-on-month in January, the ministry said in a weekly report. Russia's inflation slowed to a post-Soviet low of 5.4% in 2016 and the CBR aims to reduce it to 4% this year.

Moody's changed Moldova's rating outlook to stable from negative, with B3 rating affirmed. The agency added that Moldova's rating remains significantly constrained by high poverty levels, structural impediments to growth and very weak institutions.

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