Investment strategy Correspondent
Sujata's Feed
Jun 21, 2013

Golden ratings era ending for emerging markets

LONDON, June 21 (Reuters) – A decade of improvement in
emerging market credit ratings is coming to an end as higher
borrowing costs and commodity price falls threaten to lay bare
many countries’ failure to reform during the good times.

Between 2007 and 2012 emerging economies earned almost 200
rating upgrades from the three main agencies, nearly half of
them promotions to the top ‘investment grade’ category.

Jun 21, 2013

Stocks head for biggest weekly loss in a year

LONDON, June 21 (Reuters) – Emerging markets lost more
ground on Friday, with stocks set for their biggest weekly loss
in just over a year and central banks from Korea to Russia
wading in to stem currency falls against a resurgent dollar.

The MSCI index for emerging market stocks fell a
further 0.5 percent after the previous session’s 4 percent drop,
the biggest daily loss since September 2011 as the U.S. Federal
Reserve outlined plans to wind down its $85 billion-a-month
asset-buying programme and Chinese data confirmed a sharp
slowdown in the world’s second biggest economy.

Jun 20, 2013

Shares and bonds rocked by U.S. Fed comments

LONDON, June 20 (Reuters) – Stocks and bond prices plunged
and debt insurance costs soared in a general flight from
emerging markets on Thursday, after the U.S. Federal Reserve
laid out a timetable for turning off the taps on its $85
billion-a-month bond-buying programme.

The MSCI emerging stock index was down by over 3.3
percent, hitting its lowest level since July 2012 and heading
for its biggest one-day fall since Oct 2011, with weekly losses
of more than 6 percent, as U.S. 10-year Treasury yields
surged to 15-month highs.

Jun 19, 2013

Nigeria will probably pay 6 pct yield for Eurobond – analysts

LAGOS/LONDON, June 19 (Reuters) – Nigeria will likely have
to pay around 6 percent for a 10-year maturity on its $1 billion
Eurobond if it goes ahead with the issue after a debt meeting
with investors next week, an analyst and a fund manager said on
Wednesday.

Senior Nigerian government officials led by Finance Minister
Ngozi Okonjo-Iweala started a one-week roadshow to Britain,
Germany and the United States on Wednesday with book-runners for
the Eurobond, with a view to issuing it this year.

Jun 18, 2013

Now the yen is joining in the battering of emerging markets

LONDON, June 18 (Reuters) – Wild exchange rate swings in the
yen are giving investors an added incentive to sell holdings of
the emerging debt that not so long ago was billed as one of the
prime beneficiaries of Japan’s money-printing drive.

For an asset class that is already under pressure from
higher U.S. bond yields, this is bearish. For carry trade
investors – those who borrow a low interest rate currency, in
this case the yen, to invest in a higher-yield foreign asset -
sudden strengthening can wipe out gains almost overnight.

Jun 13, 2013
via Global Investing

The downside of investment inflows? Outflows

What goes in, can come out. And the more that goes in, the more than can come out. That’s what emerging economies have been finding out in recent weeks as capital flees their stock and bond markets.

Take the case of Russia. It’s decision last year to allow foreigners to access its domestic bonds more easily led to a boom in its OFZ or rouble debt, market, with many analysts reckoning OFZs could receive inflows of almost $50 billion in 2013-2014.

Jun 13, 2013

Exodus from emerging currencies and stocks gathers pace

LONDON, June 13 (Reuters) – Equities in emerging markets
slumped 2 percent to 11-month lows on Thursday and local
currencies slid as investors piled into the relatively safe
Japanese yen, driven by fears of future global central banks’
moves.

Central banks from India to Turkey have acted this week to
stem currency losses and on Thursday the Indonesian rupiah was
buoyed by a surprise central bank rate rise.

Jun 12, 2013

Analysis: After emerging corporate bond boom, default risks on rise

LONDON (Reuters) – The $1 trillion market in emerging corporate bonds could be headed for a surge in defaults if company earnings in swiftly depreciating roubles or pesos fail to keep pace with dollar-based debt repayments.

As the U.S. Federal Reserve considers when to turn off its printing presses, emerging currencies have crashed to multi-year lows against the dollar. That rout is a big risk for corporate debt, which has gone from being a sideshow of the sovereign bond market to an asset class that surpasses U.S. junk debt in size.

Jun 12, 2013

After emerging corporate bond boom, default risks on rise

LONDON, June 12 (Reuters) – The $1 trillion market in
emerging corporate bonds could be headed for a surge in defaults
if company earnings in swiftly depreciating roubles or pesos
fail to keep pace with dollar-based debt repayments.

As the U.S. Federal Reserve considers when to turn off its
printing presses, emerging currencies have crashed to multi-year
lows against the dollar. That rout is a big risk for corporate
debt, which has gone from being a sideshow of the sovereign bond
market to an asset class that surpasses U.S. junk debt in size.

Jun 12, 2013

MSCI stirs fears about Greece and Egypt

LONDON, June 12 (Reuters) – MSCI, the most widely used
equity index provider, prompted market fears about both Greece
and Egypt on Wednesday, after demoting the former and then
raising concerns about getting money out of the latter.

MSCI redesignated Greece an emerging market late on Tuesday,
12 years after its promotion from the category, assigning it a
tiny 0.3 percent weighting – far less than it had when last in
the emerging index.