LONDON, July 18 (Reuters) – New types of long-term investors
and flexible, “go-anywhere” investing styles are helping
transform emerging markets by making the once-volatile sector
less prone to the sweeping sector-wide sell-offs common in the
Consider recent events. Macedonia and South Africa
successfully tapped bond markets on July 17, as buyers turned a
blind eye to the ongoing Russian bond rout caused by U.S.
sanctions and the bringing-down of a passenger plane on its
border with Ukraine.
LONDON, July 16 (Reuters) – Fear of new economic sanctions
pushed Russian equities to new five-week lows on Wednesday,
while broader emerging stocks held off recent 16-month highs
after hawkish noises from the Federal Reserve boosted U.S.
While Fed Chair Janet Yellen stressed that the inflation
picture was not enough to accelerate anticipated interest rate
hikes, she also hinted that an unexpected improvement in the job
market could lead to faster rate rises than are currently priced
LONDON, July 14 (Reuters) – Hard currency reserves across
emerging markets excluding China have surged by around $100
billion from levels at the end of 2013 as central banks exploit
this year’s buoyant investment inflows to refill their depleted
With an eye on the day when U.S. interest rates eventually
start to rise, policymakers in emerging economies are actively
buying dollars. They see them as a bulwark against the kind of
selloff that ravaged their markets last year due to signs that
the U.S. bond-buying programme could soon be wound down.
Emerging markets have been attracting healthy investment flows into their stock and bond markets for much of this year and now data compiled by consultancy CrossBorder Capital shows the sector may be on the cusp of decisively turning the corner.
CrossBorder and its managing director Michael Howell say their Global Liquidity Index (GLI) — a measure of money flows through world markets — showed the sharpest improvement in almost three years in June across emerging markets. That was down to substantially looser policy by central banks in India, China and others that Howell says has moved these economies “into a rebound phase”.
LONDON, June 30 (Reuters) – Emerging market borrowers sold
over $260 billion worth of bonds in the first half of 2014,
outstripping year-ago levels despite geopolitical noise as
borrowers rushed to take advantage of lower-than-expected U.S.
The hard currency debt market was hampered by the
Ukraine-Russia conflict and a sharp fall in Russian bond sales.
But a 50-basis-point fall in U.S. 10-year yields, the benchmark
for most emerging debt, has more than made up for the
A colleague of mine, Marius Zaharia (@MZaharia) interviewed Moritz Kraemer, Standard and Poor’s head of sovereign ratings for Europe, Middle East and Africa. (you can read the interview here) Kraemer offered this piece of advice to the African governments who are busily tapping bond markets these days:
What I want to tell all those governments in africa is that you are not a successful market participant when you’ve issued your first eurobond. You are a successful participant when you’ve paid it back for the first time.
LONDON, June 27 (Reuters) – Shares in major Bulgarian banks
fell on Friday for a second straight day and the country’s
debt-insurance costs rose towards 15-month highs as problems at
its banks threatened to spread.
Elsewhere, weaker U.S. economic data reinforced the view
that the Federal Reserve would be in no hurry to tighten policy.
The dollar fell to a one-month low against major currencies and
helped to boost most emerging-market assets.
LONDON, June 25 (Reuters) – Emerging markets came under
pressure on Wednesday as conflict in Iraq kept oil prices near
their nine-month highs, but stock markets in the Gulf stabilised
as construction firm Arabtec slowed a three-day slump.
Markets have gained confidence that the U.S. Federal Reserve
will not start raising interest rates before mid-2015. But they
are being spooked by high oil prices and the prospect of Western
air strikes on Iraq, where militants are fighting government
forces less than 100 km (60 miles) from Baghdad.
LONDON, June 24 (Reuters) – An easing in sanctions-related
tension with the West is allowing Russian companies to explore
global bond markets after a four-month hiatus but they must
prepare to pay up to lure investors.
After bond buyers last week shrugged off concerns about
militant attacks in Kenya and Ecuador’s serial defaults, it
seems unlikely that bond issues from Russia’s mighty state-run
companies can fail.
LONDON, June 23 (Reuters) – Sberbank returned to global bond
markets on Monday, the first Russian state-run firm to do so
since February, while the rouble and stocks led gains on
European emerging markets thanks to strong Chinese economic
Markets broadly shrugged off the oil price surge caused by a
spreading insurgency in Iraq after a preliminary HSBC survey
showed activity in China’s factory sector expanded in June for
the first time in six months as new orders surged.