Global Investing

Ukraine and the IMF: a sense of deja vu

April 1, 2014

The West has just agreed to stump up a load of cash for Ukraine but there is a distinct sense of deja vu around it all.

“Dog-Eared” debt and the IMF’s sovereign restructuring ideas

January 31, 2014

Since April of last year, a small but growing cadre of lawyers, investors, regulators, and yes, even journalists, have been carrying around dog-eared copies of an International Monetary Fund paper (read: trial balloon) that revisits how the fund, the lender of last resort for many nations, might revamp its approach to sovereign debt restructurings.

Ukraine aid may pay off for Kremlin

December 19, 2013

Ukraine said today it was issuing a $3 billion in two-year Eurobonds at a yield of 5 percent in what seems to the start of a bailout deal with Russia. That sounds like a good deal for Kiev — its Eurobond maturing next year is trading at at a yield of 8 percent and it could not reasonably expect to tap bond markets for less than that. In addition,  Ukraine is also  getting a gas price discount from Russia that will provide an annual saving of $2.6 billion or so.

Banks cannot ease Ukraine’s reserve pain

December 9, 2013

The latest data from Ukraine shows its hard currency reserves fell $2 billion over November to $18.9 billion. That’s perilously low by any measure. (Check out this graphic showing how poorly Ukraine’s reserve adequacy ratios compare with other emerging markets: http://link.reuters.com/quq25v)

The Sub-Saharan frontier: future generations

June 3, 2013

As growth in Sub-Saharan Africa is set to post a steady 5-6 percent per annum to 2017 according to IMF estimates,  investors will be taking notes on the region’s growth story not least with the financial sector.

Paid for the risk? Egypt’s tempting pound

May 23, 2013

Surprising as it may seem, the Egyptian pound has got some fans.  The currency has languished for months at record lows against the dollar and the headlines are alarming — the lack of an IMF aid programme, meagre hard currency reserves, political upheaval. So what’s to like ?

A (costly) balancing act in Hungary

February 14, 2013

A bond trader in London is still marvelling at the market’s willingness to snap up a Eurobond from Hungary, calling it a country with “a policy mix so unorthodox even Aunty Christine won’t lend to them”.  But Hungary’s probable glee at bypassing the IMF and “Aunty Christine”  with $3.25 billion in two bonds that were almost four times oversubscribed, is probably short-sighted.

Are EM forex reserves strong enough?

By Reuters Staff
November 23, 2012

One of the big stories of the past decade has been the massive jump in central bank reserves, with total reserves having quintupled from a decade ago to around $10.6 trillion.

Emerging Policy-The inflation problem has not gone away

November 21, 2012

This week’s interest rate meetings in the developing world are highlighting that despite slower economic growth, inflation remains a problem for many countries. In some cases it could constrain  policymakers from cutting interest rates, or least from cutting as much as they would like.

Weekly Radar: Q3 earnings; China GDP; EU summit; US debate

October 11, 2012

Markets have turned glum again as October gets underway and the northern winter looms, weighed down by a relentless grind of negative commentary even if there’s been little really new information to digest. The net loss on MSCI’s world stock market index over the past seven days is a fairly restrained 1.5%, though we are now back down to early September levels. Debt markets have been better behaved. The likes of Spain’s 10-year yields are virtually unchanged over the past week amid all the rolling huff and puff from euroland. The official argument that Spain doesn’t need a bailout at these yield levels is backed up by analysis that shows even at the peak of the latest crisis in July average Spanish sovereign borrowing costs were still lower than pre-crisis days of 2006.  But with ratings downgrades still in the mix, it looks like a bit of a cat-and-mouse game for some time yet. Ten-year US Treasury yields, meantime, have nudged back higher again after the strong September US employment report and are hardly a sign of suddenly cratering world growth. What’s more, oil’s back up above $115 per barrel, with the broader CRB commodities index actually up over the past week. This contains no good news for the world, but if there are genuinely new worries about aggregate world demand, then not everyone in the commodity world has been let in on the ‘secret’ yet.