Investment strategy Correspondent
Sujata's Feed
Jul 8, 2015

Shanghai rout takes EM index back to red for 2015

LONDON, July 8 (Reuters) – Contagion from China’s equity
rout engulfed emerging markets on Wednesday, particularly in
Asia, hitting currencies and driving the main emerging equity
benchmark into the red for the year.

Also weighing on European emerging markets was the threat of
a Greek euro exit, with a possible collapse of Greece’s banks
seen taking a toll on Balkan and other regional economies.

Jul 7, 2015

Index providers MSCI, FTSE seek feedback on Greek bourse closure, capital curbs

LONDON (Reuters) – Index provider MSCI on Tuesday asked for client feedback on whether it should follow its usual practice of waiting 40 days before taking action on Greece’s stock market closure or if different treatment is justified.

MSCI’s indexes provide a benchmark for more $7 trillion of investments globally, including over $1.7 trillion of emerging market investments. The company has said it may eject Greek stocks from these categories and relegate it to “standalone” status if capital controls imposed last week are prolonged.

Jul 6, 2015

Global funds not exposed to China rout, but broader risks loom

LONDON (Reuters) – A three-week, 30 percent slide in the world’s second-biggest equity market has had only a glancing effect on emerging market portfolios still light on China’s Shanghai stocks, but the economic fallout from the shakeout poses a bigger risk.

Almost $3 trillion has been wiped off the A-shares listed in Shanghai and Shenzen since mid-June, despite increasingly frantic counter-measures. On Monday, an opening 8 percent bounce after a fresh liquidity addition gradually faded, with shares closing only 2 percent higher.

Jul 2, 2015

Investors see growing risks in Nigeria’s devaluation delay

LONDON, July 2 (Reuters) – International investors, dismayed
by Nigeria’s decision to delay a naira devaluation they see as
long overdue, will hold back from its stock and bond markets,
raising risks of a deeper crisis in Africa’s biggest economy.

The afterglow from March, when an incumbent president handed
over power after what was seen as Nigeria’s freest ever
election, is dissipating as new leader Muhammadu Buhari shows
little sign of following up on promises of economic reform.

Jun 30, 2015

Jittery European investors boost cash to three-year high: Reuters poll

LONDON (Reuters) – European investors, fearful of a looming Greek debt default, sold stocks and bonds in June and fled to the safety of cash, raising its share in portfolios to the highest in nearly three years.

A monthly survey of 20 European investment managers found that equity allocations in global portfolios had fallen to six-month lows. Bond holdings were their lowest in at least four years, as expectations grew U.S. interest rates would rise and Greece would quit the euro.

Jun 30, 2015

Funds boost cash to highest in over five years as Greece, Fed threaten turbulence

LONDON (Reuters) – Global investors increased cash holdings in their portfolios to the highest in more than five years in June, prompted by fears of market volatility with a Greek default and the first U.S. rate rise in almost a decade both looming.

The monthly Reuters survey of 47 fund managers and chief investment officers in the United States, Europe, Japan and Britain was conducted as it became evident a U.S. economic recovery was taking hold, allowing the Federal Reserve’s June 16-17 meeting to signal a rate rise in 2015.

Jun 30, 2015

Jittery European investors boost cash to three-year high – poll

LONDON (Reuters) – European investors, fearful of a looming Greek debt default, sold stocks and bonds in June and fled to the safety of cash, raising its share in portfolios to the highest in nearly three years.

A monthly survey of 20 European investment managers found that equity allocations in global portfolios had fallen to six-month lows. Bond holdings were their lowest in at least four years, as expectations grew U.S. interest rates would rise and Greece would quit the euro.

Jun 29, 2015

Chinese stocks, Russian rouble lead H1 emerging asset returns

LONDON, June 29 (Reuters) – Shanghai shares have provided
top-notch returns of 25 percent-plus so far in 2015, despite a
12 percent slump in June, vying with Russian assets and dwarfing
the performance of most other emerging markets.

Broader emerging equities were barely in the black on
Monday, just before the end of the first half-year, with a
likely default by Greece adding to the pressure. Emerging hard
currency sovereign and company bonds however have yielded
positive returns, the following graphic shows:

Jun 29, 2015

Balkan Eurobonds decline on Greek fallout fears, debt insurance costs up

LONDON, June 29 (Reuters) – Hard currency bonds from
Bulgaria and Romania fell by 1-2 cents on Monday and debt
insurance costs inched higher as a default by Greece, with close
trade and banking links to the Balkans, appeared inevitable.

Greece has less than 48 hours to pay back 1.6 billion euros
($1.77 billion) of International Monetary Fund loans, and a
default would set in train events that could lead to the
country’s exit from the euro currency bloc.

Jun 28, 2015

Credit, real estate booms raising emerging market risks-BIS

LONDON, June 28 (Reuters) – A decade of robust growth has
broadly strengthened emerging market economies but the
associated asset price booms and credit surges have increased
their vulnerability to crises, a BIS report said on Sunday.

In its quarterly review, the Bank for International
Settlements said that since 2002, emerging economies had enjoyed
one of the longest high-growth spells ever, expanding at an
average of over 6 percent a year.