Emerging Markets |

Asia’s Highest Yielder Is Losing Appeal Relative to South Africa

LAGOS (Capital Markets in Africa) – Having the highest inflation-adjusted yield in Asia isn’t enough for emerging-market bond investors any more. That’s the message from Saxo Bank A/S, which says Indonesia is losing its appeal over countries such as South Africa because of better prospects for political stability and reforms. The rupiah slumped to a two-year low this month despite offering the highest inflation-adjusted yield in Asia and after having been upgraded in recent months by ratings…

Carry Trades With Emerging FX Are Entering Bearish Momentum

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – Emerging-market carry trades are losing their appeal and they could be in for more losses, if technical indicators are any guide. A Bloomberg gauge of carry trades in eight developing-nation currencies declined 1.7 percent since reaching the most since August 2014 on Jan. 25 amid the latest market turmoil that sent volatility to the highest level since 2015 this week. The carry-trade measure fell below the 21-day moving average on Wednesday. At…

Yields Speak Louder Than Ratings for Emerging-Market Investors

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – Emerging-market investors aren’t worrying much about the opinion of ratings companies these days as the hunt for yield outweighs what they consider rear-view assessments. Most of the developing nations that were downgraded in the past six months, including Brazil, Colombia and South Africa, saw their risk premium rise just briefly following the decision before quickly resuming their downward march amid a strong risk-on mood. Part of the explanation is simple. Investors have been…

Dogs of High-Yield Sovereign Debt Keep Winning Streak Alive

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – Investing in the world’s highest-yielding debt has proven a winning strategy over the past decade. Last year was no exception. An equally weighted portfolio of bonds from the six highest-yielding emerging markets would have returned 19 percent in 2017 versus a 9.3 percent return for JPMorgan Chase & Co.’s benchmark index, according to Seaport Global Holdings LLC. It marked the eighth time in nine years the “mutts,” as fixed-income…

Emerging-Market Bulls Hold Firm After Best Rally Since 2009

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa) – Emerging-market investors who made bullish calls on equities amid this year’s monster rally are sticking to their guns, wagering that economic growth will propel gains in 2018. Money managers and strategists including Goldman Sachs Group Inc., Ashmore Group Plc and T. Rowe Price Group Inc. say this year’s 33 percent surge for the benchmark index of developing-nation stocks is justified by rising profits. Along with analysts at JPMorgan Chase & Co….

South African Rand, Brazil Pension Saga Top Emerging-Market Bill

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – Emerging-market investors can almost always count on South Africa to keep them on their toes these days. Rand-denominated bonds will trade Monday for the first time since S&P Global Ratings lowered the country’s local-currency debt to junk last week. Elsewhere in emerging markets, Brazil’s government is seeking to drum up support for the pension overhaul, Mexico will nominate a new central bank governor and India will release third-quarter economic…

Bond Winners of Yesteryear Not Looking So Fantastic in 2017

Posted on by The Editorial Team

LAGOS (Capital Markets in Africa ) – Developing-nation debt traders who stuck with 2016’s top securities took a hit this year. That’s because last year’s best emerging-market dollar bond bets are posting the starkest reversals. Venezuela, Ecuador and Gabon, which led the pack in 2016, had some of the worst changes, according to data compiled by Bloomberg on debt from 69 developing nations. Meanwhile, last year’s laggards, Mozambique and Suriname, have had the best improvements. “As the…

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