An obscure treaty threatens climate goals, but fixing it may hurt EM investment

Paul Domjan @ Tellimer Research

4 December 2021

Weekend Reading /

Global

This morning's briefing

The 10%-ers: Updating our list of distressed sovereigns. The '10%-ers' are a list of the countries with foreign bonds yielding 10% or more (or which are in default), as a proxy for who is, or might be, in distress. There are 13 countries with sovereign US$ bonds that have a yield of 10% or more (or are in default), on our count. That is the same as our last count, in August, although there have been some changes in the composition, and two more than this time last year. Given the EM bond market sell-off since September, and ongoing taper tantrum fears throughout the year, as well as the increasing emergence of idiosyncratic risks in a number of smaller EM or frontiers, it may be no surprise that the count is so high. Of these, there are nine countries with bonds yielding 10% or more. In addition, there are four countries currently in default: Lebanon, Suriname, Venezuela and Zambia. Click through for the full list and to read Stuart Culverhouse's take on which countries could be next to join the list of defaulters. Get the full story →

Didi plans to de-list from the US. Chinese ride-hailing firm Didi, which was heavily struck by China's tech crackdown, has announced plans to delist from the New York Stock Exchange. It will instead pursue a domestic listing. Read more about our take on the tech crackdown here. Get the full story →

Grab falls sharply after Nasdaq debut. Singapore-based 'super-app' Grab has debuted on Nasdaq after completion of its record $US40bn merger with Altimeter Growth Corp, the biggest SPAC deal yet. Shares opened sharply up at US$13.06 on Thursday, but declined precipitously to finish the day at US$8.75, valuing the company at US$34.6bn. Read our in-depth research on the ride-hailing, food delivery and financial services app here. Get the full story →

These days China can offer Africa vaccines as well as cash. The investment and financial pledges made by China to Africa in the triennial FOCAC, concluded on 30 November, amount to US$40bn, according to our understanding of the post-forum action plan, and this equates to a drop of one-third from the pledges made at the 2018 forum. Slowing Chinese domestic growth and retaining financial buffers for greater economic, domestic political, and foreign policy risks ahead is surely playing a role. But the drop in investment and financial pledges may also be explained by China's ability in the Covid era to gain geopolitical goodwill via the provision of vaccines. The one billion doses pledged by China – 60% via donation and 40% via manufacture by China-Africa joint ventures – are enough to double-dose close to 60% of the total adult population of Africa. Click through for more detailed discussion of China's involvement in Africa and how it competes for influence with the US. Get the full story →

Omicron – the emerging markets that are best prepared for the new Covid variant. Omicron has sparked concern over how fast it might be transmitted, the level of protection from current vaccines as well as from prior infection, and the re-imposition of lockdowns and travel restrictions. But the behaviour of markets to the initial Covid outbreak (globally) and to the emergence of the Delta variant (eg in India) suggests any sell-off is temporary. Differences between Omicron today and Delta in Q1 2021 include: 1) higher vaccination and prior infection; but 2) less space for stimulus. See our full report for our assessment of the emerging markets best prepared to face Omicron, based on vaccination, prior infection, lockdowns, real interest rates, and fiscal deficits. Get the full story →

Tellimer's global investment themes for 2022. This year has seen the drivers of the post-Covid world begin to emerge. We have identified 11 major trends that will shape investing over the next 12 months, and beyond. We divide our 2022 Global Themes into four categories: (1) Inflation and rising rates; (2) Ethical investing; (3) Blockchain and crypto; (4) Technological innovations to change industries. Click here to access the full report. Get the full story →

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Equity Analysis /

Singapore

Manulife US Real Estate Investment Trust: Highly anticipated entry into high-growth cities

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Macro Analysis /

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The Commodities Feed: Saudis increase January OSP’s

After a weak close on Friday oil markets have opened stronger this morning. What makes the move even more strange is that the increase has come at a time when the Brent/Dubai spread has been narrowing. This is the smallest position they have held sin...

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Equity Analysis /

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Egypt Banking Sector 2022: Supported by macro backdrop

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Macro Analysis /

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Aussie Slumps below $0.7000 and the Loonie Can't Sustain Upticks Despite a Monster Jobs Report

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Earnings Report /

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Qalaa Holdings: 3Q21 – despite revenue surge, losses are maintained; Maintain EW

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Macro Analysis /

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US CPI to Accelerate, while Omicron adds Color to Covid Wave that was Already Evident

At the risk of over-simplifying, there seem to be three sources of dynamism in the investment climate: Covid, the Federal Reserve, and market positioning. If pressed, some argue the franc and yen are safe havens because they have current account surp...

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Weekend Reading /

Global

An obscure treaty threatens climate goals, but fixing it may hurt EM investment

A key to making happen this was reducing perceived political risk so that investors could accept the additional constraint of local content requirements. Although the ECT was always designed to support oil and gas investment, you would not know it fr...

Tellimer Research @ Tellimer Research

4 December 2021

Macro Analysis /

Global

Mexico: Ahead of the Curve

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Macro Analysis /

Global

Eurodollar University Episode 168, Part 3: The Red Pill of Growth ‘Scare’

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Alhambra Investments @ Alhambra Investments

4 December 2021

Macro Analysis /

Global

Euro$ Futures: There Be Landmines

This wasn’t meant to be a running tally. Even if you haven’t seen the Treasury market today, this still wouldn’t be too difficult an answer. Eurodollar futures have inverted and that inversion has spread, while the JGB 10s seem likely to take another...

Alhambra Investments @ Alhambra Investments

4 December 2021