Promsvyazbank, one of a number of large private lenders to be taken under the government wing over the past year, is set to assume an unusual role of the Russian military’s main coffer. Manulife senior analyst Richard Segal considers the prospects of such a specialized lending institution in a challenging landscape of sector consolidation and international sanctions.
In 2011 winds of change swept through MENA, and what followed was a tumultuous period for many African economies in particular. Seven years on, some, like Libya, are still struggling to recover from the turmoil, but others, like Tunisia or Morocco, are revitalized and in many ways emboldened. Indeed, many of their markets have much to show for it.
As Russia re-emerges from the sub-investment grade mire, Ashmore's Head of Research Jan Dehn questions the sensibility of the original downgrade and, more broadly, the approach credit rating agencies take on assessing sovereign risk.
After a traumatic few years catalysed by the annexation of Crimea and the ensuing civil conflict with its easternmost regions, Ukraine has developed a certain degree of flexibility in managing a series of shocks encountered since. But a lack of progress on crucial reforms, political mismanagement, and consistent lack of access to credit for key sectors like agriculture threaten the progress achieved so far.
Brown Brothers Harriman: produced the following ratings model to assess relative sovereign risk in Frontier Markets. A country’s score directly reflects its creditworthiness and underlying ability to service its external debt obligations.
Almost 20 years ago, global fixed income investors scarcely heard of the word ‘sukuk’, let alone understood the asset’s unique structural features or benefits. Much has changed since, with the global sukuk issuance topping USD74.8bn at the end of 2016. But with the asset class’ impressive growth being hamstrung by liquidity shortages and a lack of global standards, the development and proliferation of those standards – and a protracted effort on behalf of market makers to harmonise those standards – is needed to help take the market to the next level.
With fresh forecasts predicting a deceleration in the country’s economic contraction and borrowers making fresh strides in the local credit market, Nigeria is poised to make strong gains in 2018. Transforming those gains into longer-term sustainable growth will depend heavily on the country’s commitment to reforms, but with elections in the offing and oil prices rising, some analysts question its resolve for staying on the reform path.
The decline in the Dollar versus Emerging Markets (EM) currencies began two years ago with more room to run, in our view. The unwinding of QE policies in the coming years will continue to weigh on the Dollar, and EM stands to benefit as capital inflows to EM ease important financial constraints. This should unleash stronger domestic demand and eventually more rate hikes than the Fed will deliver.
Over the past three years, the Central Bank of Russia has done an impressive job of staving off financial crisis while continuing to consolidate the country’s bloated banking sector. But as the state’s share in the sector approaches 70%, questions are being asked about the sustainability of its approach and the risks for private lenders, particularly those headquartered abroad.
With Zimbabwe’s infamous revolutionary-turned-dictator Robert Mugabe out and one of his main rivals left to pick up the pieces of an economy in tatters, the country’s prospects are anything but clear. Analysts are optimistic that policymakers can find a path to normalisation – creating significant opportunities for international and regional lenders, and the country’s credit markets, in the process. Tough decisions will need to be made.
- 2018 Outlook for Emerging and Frontier Markets
- How African Microfinance Lenders Can Gain Access to Capital Markets
- Telecoms Boom to Drive MENA Infrastructure Development Programmes
- Emerging Markets’ Greatest Bond Villain: Venezuela Enters Record-Breaking Default
- Markets Tense Up as Justice Rules Kenyan Election Void
9 Mar 2018
8 Mar 2018