Latest news with #Tellimer
TimesLIVE
6 days ago
- Business
- TimesLIVE
Surge in cedi currency eases Ghana's foreign debt burden
Ghana's cedi currency has jumped more than 40% versus the US dollar this year, far outperforming its African and emerging market peers, shrinking the cost of the country's foreign debt and giving it more fiscal breathing room. The rally, which has surprised some investors, is another much-needed boost for the West African nation as it claws its way back from debt default and a punishing economic crisis. In all the cedi has gained 42% against the dollar since January, changing hands near 10.20 to the greenback on Wednesday morning according to LSEG data. "We have reduced our total debt over the last five months by almost 150-billion cedis [R260.78bn] which is very significant," Ghanaian President John Mahama told a session during the African Development Bank annual meeting in Abidjan this week, citing the cedi strength. "If that trajectory continues, the target of reaching 55-58% debt sustainability by 2028 will be reached by the end of this year. And that means that it begins to give us fiscal space to begin to invest in the most productive sectors of the economy." While the dollar has also been under pressure this year, the cedi's performance stands in stark contrast to other African currencies. Investment bank JPMorgan, in a note to clients, said the gold windfall — with prices having chalked up 28 record highs by April — was a tailwind for the cedi. Tellimer's Hasnain Malik, in a note, said the country's on-track International Monetary Fund (IMF) programme, as well as restrictive monetary policy, have also helped the "extraordinary spike". Lutz Röhmeyer, head of portfolio management at Capitulum Asset Management, said local Ghanaian holders of dollar debt exchanging their money back into cedis was also helping the gains. On Monday Ghana's central bank governor Johnson Asiama, speaking at the Ghana CEO Summit in Accra, said the central bank had not used its own reserves to support the cedi. He cited tight monetary policy, cleaner FX auctions and stronger remittance flows. But Malik and Röhmeyer each warned that the rally may not last. "There are reasons for caution after this spike," Malik wrote in the Tellimer note, citing drops in oil and cocoa prices, IMF forecasts that implied a coming depreciation.
Business Recorder
08-05-2025
- Business
- Business Recorder
Pakistan bonds gyrate
LONDON/KARACHI: Pakistan's international bonds rose on Wednesday after India launched strikes on the country. The country's international bonds gained nearly 1 cent, reversing losses of the same amount during early trading, according to Tradeweb data. The 2031 bond, which notched the biggest gains, was bid at just over 81 cents in the dollar. 'The reliance of Pakistan on external capital inflow – in recovery from an external account crisis, in the midst of an IMF programme, and with under three months of import cover compared to over nine months in India – makes its asset prices much more sensitive to any conflict than those in India,' said Hasnain Malik at Tellimer in Dubai. Finance ministry said it had held an emergency meeting to review market resilience and national financial security, adding that robust measures to safeguard economic infrastructure and provide clarity and confidence to markets are being implemented, though did not give details. IMF LIFELINE The IMF executive board is scheduled to sign off on May 9 on a staff-level agreement that would trigger a $1 billion payout as well as Pakistan's new $1.3 billion arrangement under a climate resilience loan programme. 'Investors seem optimistic on the upcoming IMF board meeting which will decide on the loan tranche for Pakistan,' said Sohail Mohammed, CEO of Topline Securities in Pakistan. The IMF did not immediately comment when contacted by Reuters. The escalation follows the suspension of the Indus Waters Treaty by India, which has sharply downgraded diplomatic links to its neighbour after the April terror attack in IIOJK. 'The conflict between India and Pakistan has escalated dangerously,' said Sakib Sherani, economist and head of Macro Economic Insights, adding that India's request to the IMF earlier this week to review loans disbursed to Pakistan was adding to Islamabad's woes. 'All these actions will hurt Pakistan's fragile economic recovery.' Rating agency Moody's warned on Monday that rising tensions between the two countries could weigh on Pakistan's growth. Others were more sanguine, saying India had also much to lose economically from an escalation in the conflict and Pakistan was in much better shape economically to weather the fallout from the tensions following recent reforms. 'Reports of the IMF program being affected purely because of representations by one country on the board of the IMF are overblown,' said Reza Baqir, head of sovereign advisory at Alvarez & Marsal and a former Pakistan central bank chief and IMF official.
Zawya
07-05-2025
- Business
- Zawya
Pakistan assets dip as India strikes; Polish zloty down ahead of rate decision
Pakistan's assets dipped on Wednesday after Indian military strikes targeted regions in Pakistan and Pakistani Kashmir, while a series of central bank decisions across Central Europe were due later in the day. Islamabad's benchmark stock index plunged as much as 5.8%, while the Pakistani rupee weakened to a near two-week low against the U.S. dollar as India's attack in response to the killings of tourists in April escalated the most intense hostilities between the nuclear-armed neighbors in over two decades. The nation's long-dated 2036 international dollar bond dipped by 0.9 cents, settling at a bid of 72.477 cents, according to Tradeweb data. Indian equity benchmarks shook off initial losses to trade flat. The Indian rupee slipped 0.5%, while government bond yields dropped early in the session as traders indicated possible bargain buying by investors. "The reliance of Pakistan on external capital inflow — in recovery from an external account crisis, in the midst of an IMF programme, and with under 3 months of import cover compared to over 9 months in India — makes its asset prices much more sensitive to any conflict than those in India," said Hasnain Malik, head of equity research at Tellimer, a research firm. Meanwhile, MSCI's emerging market currencies index was marginally lower, while its stock counterpart held flat. Turning to Central and Eastern Europe, the Czech koruna held firm against the euro, as markets awaited the Czech National Bank meeting amid expectation of what analysts describe as a "hawkish" quarter-point rate cut. Prague's benchmark stock index gained 1%. "The rate cut is basically a deal done by 25bps. We expect forward guidance to be hawkish, while the new forecast should be more mixed," said Frantisek Taborsky, EMEA FX & FI strategist at ING. The Polish zloty slipped 0.2% ahead of the National Bank of Poland's interest rate decision, where expectations are set for a reduction in borrowing costs for the first time since 2023. A Reuters poll suggests the central bank might implement a 50 basis point cut. Warsaw's benchmark stock index rose 1%. In Asia, cautious sentiment prevailed ahead of an impending meeting between top U.S. and Chinese trade officials. Hong Kong's Hang Seng relinquished early gains but managed to close up 0.1%, while China's blue-chip index ticked up 0.6%. The rally in Asian currencies, buoyed by a softer dollar, fizzled out. The Taiwanese dollar declined 1.2% after posting an unprecedented 6% two-day surge against the greenback. The South Korean won fell 1.3% as minutes from the central bank suggested that another rate cut was on the cards. Meanwhile, a rate cut in China exerted pressure on the Chinese yuan. The spotlight is also on the U.S. Federal Reserve's rate decision, due later in the day. Investors expect no changes. For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see (Reporting by Pranav Kashyap and Medha Singh in Bangalore; Editing by Mrigank Dhaniwala) Reuters
Yahoo
11-04-2025
- Business
- Yahoo
Trade turmoil stymies emerging market bond sale bonanza
By Colleen Goko JOHANNESBURG (Reuters) -Turmoil in the wake of U.S. President Donald Trump's tariff hikes has abruptly stalled emerging market sovereign debt sales in April, after issuance from developing nations and companies shattered first-quarter records. April is usually a busy month for emerging market debt sales on international capital markets, but policy uncertainty, fears of global recession and spiking U.S. yields have choked risk appetite. No sovereign has tapped hard currency markets so far in April, according to investment research company Tellimer. This is in sharp contrast to the first quarter, where emerging market firms issued $150 billion and sovereigns $89 billion, according to calculations from JPMorgan. While the White House this week paused for 90 days the sweeping new tariffs it had introduced on April 2, sentiment has not recovered, said analysts. Frontier markets, or smaller, riskier economies - many of which are in Africa - have found themselves at the sharp end of recent market turmoil. "At the moment, we should not expect any issuance at all," said Andrew Matheny, managing director of economics research at Goldman Sachs, referring to any potential eurobond sales from Africa in the short term. "Whether countries will be able to access markets later in the year will depend on how the global economy evolves." While total repayments on international debt from emerging markets are relatively modest this year, refinancing needs remain significant — especially for high-yield issuers. Frontier markets have seen yields on a large share of their bonds rise above 10% by early April. That effectively shuts them out of international markets, cutting off a source of funding to plug external financing gaps. Overall, spreads on emerging market dollar debt have widened by more than 50 basis points since February, with high-yield sovereigns seeing the steepest moves, Tellimer reported. Analysts say hefty issuance early in the year might have been driven by front-loading, warning that subdued April activity, if prolonged, could expose weaknesses in net financing positions, especially for high-yield borrowers. Nations that managed to get deals done since the start of the year include Romania, Ivory Coast, Morocco, Montenegro and Armenia. Five-year issuance average for April is $52 billion, the fourth highest monthly tally, JPMorgan calculations show, but may end up falling below that this year due to the tariff uncertainty, which may lead to restrained supply. "Prospects for the rest of the year are on hold especially given what's happening in the global context," said Aurelie Martin at asset manager Ninety One. JPMorgan expects emerging market issuance to reach $576 billion this year, of which $323 billion would come from sovereigns - well below the COVID peak when issuance rose to $743 billion. Sign in to access your portfolio
Reuters
11-04-2025
- Business
- Reuters
EM nations hit pause on debt sales after record first quarter
JOHANNESBURG, April 11 (Reuters) - Turmoil in the wake of U.S. President Donald Trump's tariff hikes has abruptly stalled emerging market sovereign debt sales in April, after issuance from developing nations and companies shattered first-quarter records. April is usually a busy month for emerging market debt sales on international capital markets, but policy uncertainty, fears of global recession and spiking U.S. yields have choked risk appetite. No sovereign has tapped hard currency markets so far in April, according to investment research company Tellimer. This is in sharp contrast to the first quarter, where emerging market firms issued $150 billion and sovereigns $89 billion, according to calculations from JPMorgan. While the White House this week paused for 90 days the sweeping new tariffs it had introduced on April 2, sentiment has not recovered, said analysts. Frontier markets, or smaller, riskier economies - many of which are in Africa - have found themselves at the sharp end of recent market turmoil. "At the moment, we should not expect any issuance at all," said Andrew Matheny, managing director of economics research at Goldman Sachs, referring to any potential eurobond sales from Africa in the short term. "Whether countries will be able to access markets later in the year will depend on how the global economy evolves." While total repayments on international debt from emerging markets are relatively modest this year, refinancing needs remain significant — especially for high-yield issuers. Frontier markets have seen yields on a large share of their bonds rise above 10% by early April. That effectively shuts them out of international markets, cutting off a source of funding to plug external financing gaps. Overall, spreads on emerging market dollar debt have widened by more than 50 basis points since February, with high-yield sovereigns seeing the steepest moves, Tellimer reported. Analysts say hefty issuance early in the year might have been driven by front-loading, warning that subdued April activity, if prolonged, could expose weaknesses in net financing positions, especially for high-yield borrowers. Nations that managed to get deals done since the start of the year include Romania, Ivory Coast, Morocco, Montenegro and Armenia. Five-year issuance average for April is $52 billion, the fourth highest monthly tally, JPMorgan calculations show, but may end up falling below that this year due to the tariff uncertainty, which may lead to restrained supply. "Prospects for the rest of the year are on hold especially given what's happening in the global context," said Aurelie Martin at asset manager Ninety One. JPMorgan expects emerging market issuance to reach $576 billion this year, of which $323 billion would come from sovereigns - well below the COVID peak when issuance rose to $743 billion.
