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FX reserves – China has enough, Says Standard Bank

LAGOS (Capital Markets in Africa) – China’s foreign exchange reserves are now below USD3tr, the lowest in three years. In fact, relative to GDP, this is the lowest since the early 2000s. China has seen a material decline in reserves-to-GDP since 2008 resulting from declining global demand combined with growing outbound investment. More recently, the sharp decline in China’s once heralded reserves has come with the defence of the renminbi, triggering concerns in global financial…

Volatile Pound Stokes Life Into Emerging-Market Carry Trades

Posted on by The Editorial Team

LONDON (Capital Markets in Africa) – There’s life in the great emerging-market carry trade yet, although now it comes with a twist. Investors are betting a trade that reaped returns of more than 20 percent last year for borrowing dollars to buy Brazil’s real, Russia’s ruble and South Africa’s rand has further to run — only they’re using the battered British pound to fund long positions in emerging-market currencies. Citigroup Inc. on Monday named shorting the pound against the Russian…

Moody’s: Currency shifts to widen gap between global economies in 2015-16

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London (Capital Markets in Africa):- Robust US growth and stabilising financing conditions will help the global economy to grow more strongly next year after muted growth in 2015, says Moody’s Investors Service in its quarterly Global Macro Outlook report. Divergence between the major economies is likely to widen. The report “Global Macro Outlook: 2015-16. Stronger US Dollar and Shifts in Capital Flows Stoke Divisions in Global Growth”, is now available on www.moodys.com. Moody’s subscribers can…

Global Private Equity & Venture Capital Investment in 2014

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Private equity fundraising down 9% to $486bn in 2014Preliminary figures released by research provider Preqin indicate that global private equity fundraising reached $485.7bn in 2014, constituting a drop of 8.7% from $532bn in 2013. Prequin expects the fundraising figure for 2014 to increase by 10% to 20% as more information becomes available. On a quarterly basis, 253 private equity funds raised $110bn in the first quarter 2014, 276 funds secured $153bn in the second quarter,…

Drop in oil prices to support global growth

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The World Bank anticipated that the decline in global oil prices would have significant macroeconomic, financial and policy implications on the global economy. First, the Bank pointed out that sustained lower global oil prices would contribute to global growth, would temporarily reduce the global inflation rate in 2015 and would generate substantial real income shifts to oil importers from oil-exporters. But it noted that the recovery in global growth would be slow. It said that…

Broadly stable global sovereign outlook for 2015

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The global sovereign outlook for 2015 is broadly stable – a change from the diverse global trends seen in recent years, according to Moody’s 2015 Outlook: Global Sovereigns. The financial crisis and the sovereign debt crisis laid bare weaknesses in the credit quality of euro area sovereigns which resulted in widespread downgrades. In contrast, the economic benefits derived from the ‘commodities supercycle’ allied with structural and institutional reforms allowed material credit improvements (and consequently rating…