Emerging Markets Daily - August 25
SEC Warns U.S-Listed Chinese Firms, Delta Variant Hits SE Asia Growth, Africa Debt Concerns, FinTech for Filipino Ship Crew, Algeria-Morocco Dispute Heats Up
The Top 5 Stories Shaping Emerging Markets from Global Media - August 25
SEC Chair To U.S Listed Chinese Firms: Accept More Scrutiny or Get Out
Bloomberg
“Securities and Exchange Commission Chair Gary Gensler has a warning for hundreds of Chinese companies that have raised billions of dollars in U.S. markets: Submit to more scrutiny soon or get kicked out.”
“In a Tuesday interview, he pledged to strictly enforce a three-year deadline that requires Chinese firms to permit inspections of their financial audits. If businesses refuse, their shares could be delisted from the New York Stock Exchange and Nasdaq as soon as 2024. ‘The path is clear,’ Gensler said. ‘The clock is ticking.’”
“The tough stance would seem to squash the hopes of some on Wall Street that Gensler might drag his feet in implementing the mandate from Congress and give Beijing more time to strike a deal with Washington regulators that allows the gravy train of Chinese stock sales to continue. They’ve been lucrative for big banks, exchanges and asset managers.”
“In his comments, Gensler laid out how he plans to deal with a multitude of tricky investor protection issues involving China. The conflicts, which have festered for almost two decades, have come to the fore in recent months as the Chinese government reined in prominent companies that trade on American exchanges, causing massive drops in their share prices and rattling investors.” Robert Schmidt and Benjamin Bain report.
Malaysia Leads SE Asia GDP Downgrades amid Delta Variant's Grip
The Straits Times
“Malaysia leads growth downgrades by economists across South-east Asia as the Delta variant forces countries to reimpose pandemic restrictions.”
“Malaysia's growth outlook for this year was downgraded the most, a swing of 1.4 percentage points to a 4.3 per cent expansion, according to the latest economist survey results compiled by Bloomberg. Thailand, downgraded to 1.2 per cent from 2.4 per cent in May's survey, is still expected to post the slowest growth.”
“Singapore is the only country in the region to buck the downgrade trend. It is now forecast to grow 6.5 per cent compared with a previous estimate of 6.3 per cent.”
“The rapid spread of the highly infectious Delta variant and low vaccinate rates have caught much of South-east Asia off guard. The region registered robust economic recovery in the second quarter, but that was flattered by comparisons with last year's crash.” Straits Times report
Concern Over Rising Debt As Africa Faces First Recession in 30 Years
AllAfrica
“Regional borrowing induced by macro economic impacts of the Coronavirus pandemic - which has led to the first economic recession in Africa for thirty years, is placing citizens at great risks, the African Forum and Network on Debt and Development (AFRODAD) has noted.”
“In a press statement, AFRODAD which is is organizing hundreds of citizens across the African continent to participate in the inaugural African Conference on Debt and Development (AfCoDD), called for greater protection of those with lower levels of education, few assets, and working in informal jobs.”
“‘The African Debt crisis has been accelerated by the onset of the global health pandemic and while many developing countries were already facing crisis before the pandemic, the nature of developing countries' debt is far more complex than in the past, with a new landscape that poses greater risks.’” Donald Nyarota reports
Fintech Hits High Seas with Philippine e-money App for Sailors
Nikkei Asia
“The Philippines, home to the most merchant ship crew members in the world, has produced a personal finance app that hopes to take the industry by storm.”
“Fintech startup MarCoPay was founded two years ago in Manila as a 50-50 joint venture between Philippine logistics giant Transnational Diversified Group and Japanese marine transporter Nippon Yusen. Japanese trading house Marubeni purchased a stake in June.”
“From wage payments in electronic money, MarCoPay will branch out into mortgages and other financial services for sailors who spend months away from home with only a phone to connect them to life on land. For MarCoPay, they represent an $8 billion market.”
“…There are 1.5 million sailors on merchant vessels around the world. The Philippines is home to the most, at 220,000, a 15% share.” Yuichi Shiga and Kazuto Shimada report
Geopolitics: Algeria Cuts Diplomatic Ties with Morocco
France24
“Algeria's Foreign Minister Ramtane Lamamra said Tuesday that his country has severed diplomatic relations with Morocco due to ‘hostile actions’, following months of resurgent tensions between the North African rivals.”
“The countries have long accused one another of backing opposition movements as proxies, with Algeria's support for separatists in the disputed region of Western Sahara a particular bone of contention for Morocco.”
“…The rupture followed a review of bilateral relations announced by Algeria last week as it alleged its neighbour was complicit in deadly forest fires that ravaged the country's north.”
“…‘The Moroccan provocation reached its climax when a Moroccan delegate to the United Nations demanded the independence of the people of the Kabylie region,’ Lamamra said Tuesday.”
“"…The border between Algeria and Morocco has been closed since 1994.” AFP reports