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Emerging Markets Daily - April 22
New Covid Surge Ravages India, Malaysia Issues 'Green' Islamic Bond, Putin Warns Domestic and Foreign Foes, Egypt GDP Growth Solid, New Africa Amazon HQ in Cape Town
The Top 5 Emerging Markets Stories from Global Media - April 22
COVID: India Sees World's Highest Daily Cases Amid Oxygen Shortage
BBC and Bloomberg
“India has reported 314,835 new coronavirus cases in the last 24 hours - the highest one-day tally recorded anywhere in the world.”
“Deaths rose by 2,104 in the same time period, India's worst daily toll. It brings the country's total confirmed cases close to 16 million, second only to the US's 31.9 million.”
“India is in the grip of a vicious second wave and an acute oxygen shortage is raising more fears about its overwhelmed health care system.” BBC News reports
Meanwhile, Bloomberg reports that: “the relatively slow pace of vaccinations is adding to the problem. India has administered more than 132 million vaccine doses, according to data from its health ministry. That’s enough to cover only about 4.8% of its population, according to Bloomberg’s vaccine tracker.”
“The outbreak threatens to derail the Indian economy, which had just begun to recover after a nationwide lockdown last year pushed it into a historic recession. A new virus variant with a double mutation has also been detected locally, and concerns are growing that it’s driving the new wave…”
“The ferocity of the second wave is also resonating with investors and analysts. Indian stocks and the rupee have turned Asia’s worst performers this month as sentiment soured, while credit default swaps also surged. Care Ratings Ltd. on Wednesday lowered India’s gross domestic product growth forecast for the current fiscal year to 10.2%, from as much as 11.2% last month. This is its second downward revision in less than a month.” Bloomberg reports.
Malaysia Issues $800 Million Sustainable Islamic Bond, First Of Its Kind
The Jakarta Post
“Malaysia has issued $800 million 10-year trust certificates, world's first sovereign US dollar sustainability sukuk, the finance ministry said on Thursday. In addition, the country also issued $500 million 30-year trust certificates, the ministry said in a statement, quoted by Reuters.”
“Malaysia upsized the sukuk (Islamic bond) offering from initial target size of $1.0 billion to $1.3 billion due to overwhelming demand as oversubscription hit 6.4 times. Sustainable debt issuance rose 29 percent last year to a record $732 billion, according to figures from Bloomberg.”
“Indonesia sold green debt that complies with religious principles in 2018, making it the first country in the world to issue such securities, according to a United Nations Development Programme report.”
“‘Demand for ESG or sustainability-linked bonds continues to gain traction while there is still a limited supply’ of such issuance from Southeast Asia, said Winson Phoon, head of fixed-income research at Maybank Kim Eng Securities in Singapore, quoted by Bloomberg. ‘Adding the sustainability label helps widen further the investor base.’ Jakarta Post reports.
Geopolitics: In Defiant Remarks, Putin Warns Foreign and Domestic Foes
Wall Street Journal
“President Vladimir Putin said Moscow would deliver a swift and harsh response to any foreign threat, a warning that comes amid a vast Russian military buildup at the border with Ukraine and a growing protest movement at home.”
“Mr. Putin’s remarks, in his annual state of the nation address, showed the Russian leader taking a harder line against his perceived adversaries as domestic criticism coalesces around the fate of jailed opposition activist Alexei Navalny…”
“‘We really do not want to burn bridges,” [Putin] said. “But if anyone mistakes our good intentions for indifference or weakness and plans to burn or even blow up those bridges, they should know that Russia will respond asymmetrically, swiftly and harshly.’”
“Russia’s military buildup on the Ukraine border, mounting cease-fire violations and increasingly heated rhetoric between Moscow and Kyiv have stoked concerns that the conflict could quickly escalate and worsen fraught relations with the U.S. and the North Atlantic Treaty Organization.”
“Western officials estimate that Russia has deployed between 80,000 and 100,000 troops near Ukraine’s border, larger than the force the Russians deployed when they seized Crimea in 2014 and sent troops into eastern Ukraine.” Ann M. Simmons reports.
Egypt To See GDP Growth Return to Pre-Covid Levels in ‘21, Fitch Says
“Egypt is one of three MENA economies that will see GDP growth return to pre-covid levels in 2021, Fitch Solutions analysts said on Tuesday. ‘The Central Bank of Egypt’s (CBE) monetary easing of 400 bps last year, as well as expanded fiscal spending and well-executed stimulus policies, helped to cushion the economic blow of the pandemic,’ MENA country risk analyst Selim Elbadri said.”
“Egypt’s GDP is expected to grow at a 2.9% clip in FY2020-2021, marking a slight downwards revision of the 3% Fitch predicted in January due to the vaccine rollout. The recovery of the tourism sector, the expansion in natural gas production, and Suez Canal revenues, as well as the monetary easing policies of the Central Bank of Egypt (CBE) are expected to drive the country’s economic growth, according to Badri.”
“Also, the International Monetary Fund (IMF) forecast that the Egyptian economy's growth rate during the current year will be 2.5 percent compared with 3.6 percent in 2020.” Asharq Al-Awsat reports.
New Amazon Africa HQ to Begin Construction in Cape Town
“The City of Cape Town has given the green light for the construction of a new mega-development housing Amazon Inc’s new Africa base in the heart of Cape Town’s emerging tech hub.”
“Amazon will be the main tenant in the $280m (R4bn) River Club project that will also house residential units, office space, restaurants and a 200-room hotel. The municipality granted approval for the sprawling multiplex to be built across 15 hectares of land over three to five years on Sunday…”
“The project will create around 19, 500 jobs…The announcement sparked outcry from environmental and civil society groups, who say the project ransacks the local ecosystem and dishonors a sacred heritage site of the indigenous Khoi people, who settled on the land when they were driven from another area by Dutch settlers.”
“The development will also block the valley, aggravating flooding, climate change and drought, environmentalists say. A local civil society group, The Observatory Civic Association (OCA), launched a fund-raising appeal on social media to take the project developers, the Liesbeek Leisure Properties Trust, to the high court, continuing five-year legal battle against the firm.”
Defending the move, the City of Cape Town insisted the project was ‘sustainable’ and ‘balances ecological conservation and urban development.’” African Business reports.