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Macro

COVID-19 Could Restart US-China Trade Tensions – Control Risks

With the US likely to fall into a recession combined with widespread social disruption caused by the lockdown, Trump’s re-election this November appears uncertain. Far from soothing tensions between the US and China, the pandemic has heightened them.

27 Mar 2020

Bips & Pieces Asia Pacific Policy & Government

Kenyan Bond Yields Spike Due to Pandemic, Locust Disruption – Cytonn Investments

As the COVID-19 pandemic wracks emerging and developed economies alike, market have gone into overdrive with shares and bonds both suffering heavy sell-offs as investors flee to the safety of US dollars. Kenya’s local currency treasury bonds (TBs) and outstanding Eurobonds have been no exception to this trend.

26 Mar 2020

UAE Bank to See Asset Quality Weaken – Fitch Ratings

The impact of the coronavirus is being felt by countries and sectors worldwide, but the UAE is particularly sensitive as key sectors like oil & gas and logistics feel the disruption more severely. For the country’s banking sector, the pandemic looks set to place additional pressure on banks’ credit profiles by reducing asset quality, according to a note from Fitch Ratings.

24 Mar 2020

Which SSA Economies are Most Vulnerable to COVID-19?

Africa appears so far – at least according to official statistics – to have contained the spread of COVID-19, with SSA reporting fewer than 300 confirmed cases. But this does not mean the region will be able to ride out the storm and avoid the economic and health impact seen elsewhere.

24 Mar 2020

Do Current Valuations Compensate Investors for Increased Default Risk?

As COVID-19 and the ongoing oil price spat between Riyadh and Moscow continues to wreak havoc on markets across the world, the spreads on high yield assets in both EM and DM have widened significantly. With many companies seeing their revenues take a beating at countries go into lockdown, and with many sovereigns juggling their need for fiscal stimulus with already lopsided public finances, Iain…

23 Mar 2020

As Flight to Safety Escalates, Fiscal Stimulus Prospects Vary Widely Across Emerging Markets

Total spread widening for the EMBI Global Index has reached a remarkable 286bp, according to ING, more than the 241bp monthly change seen at the peak of the 2008 crisis. Fiscal injections will be required across the board, but continued access to the debt capital markets will be instrumental for countries to pursue fiscal easing to soften the blow from the economic slowdown.

20 Mar 2020

Latin America’s Governments Rush Through Stimulus Measures to Counter Pandemic Impact

Brazil, Argentina, Peru and Colombia have announced urgent fiscal stimulus measures to compliment monetary policy moves introduced over the past two weeks to sooth markets after a huge spike in volatility.

20 Mar 2020

Central Bank of Kenya Likely to Cut Rates by 25-50bps – Sterling Capital

Ahead of the next Monetary Policy Committee meeting of the Central Bank of Kenya on Monday 23rd March, Sterling Capital predicts a rate cut of 25-50bps.

20 Mar 2020

Downgrade of South African Sovereign Now 'Probable' – Nedbank Analysts

As the ongoing COVID-19 pandemic collides with a crash in the oil price and a broader deceleration of growth, the South Africa sovereign looks set to struggle. According to Jones Gondo, Senior Credit Analyst and Nthulleng Mphahlele, Analyst at Nedbank, the risk of the big three rating agencies downgrading South Africa has been significantly heightened.

19 Mar 2020

EM Outflows at Near-Record Level since January– IIF

The cumulative negative impact of the coronavirus-related shocks on capital volumes going into EMs has surpassed lows seen during the Taper Tantrum and the peak of the global financial crisis, latest numbers posted by the IIF suggest.

18 Mar 2020

Debt Capital Markets Are Crucial to Success of Saudi Vision 2030, but Some Bankers Say it's Underutilised

Vision 2030, Saudi Arabia’s ambitious plan to transform the economy and diversify away from oil production, has seen the country develop the largest project pipeline in the region. But the government’s apparent reluctance to raise funds through the debt capital markets risks undermining Vision 2030, according senior investment bankers based in the region.

18 Mar 2020

Do Central Banks Need New Guidelines Around How They Communicate?

The past 20 years has seen central banks assume far more prominence in day-to-day economic discourse and decision-making than many are likely to appreciate, and alongside that huge transformation came an equally significant shift in how these emboldened titans communicate with the market. But when it comes to managing the market’s expectations, arguably the fundamental role central banks play…

17 Mar 2020

BBH: EM Preview for the Week Ahead

Market sentiment is likely to open this week on an upswing after the Fed’s emergency rate cut and expanded QE were announced Sunday afternoon local time. Yet as we have seen time and again this past couple of weeks, added stimulus has had little lasting impact on markets as the virus numbers continue to worsen. Europe is now reporting more daily cases than China did at its peak. We remain…

16 Mar 2020

Corporate Bond Meltdown Could Expose Debt Vulnerabilities in Emerging Markets Despite Coordinated Easing

The ongoing sell-off could raise fears over a global corporate debt bubble, with EM companies particularly vulnerable as uncertainty over the extent and timeline of the COVID19 epidemic persists, IIF analysis explain in a recent research update.

16 Mar 2020

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