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Emerging Markets Daily - February 14
S. Korea Coupang Heads for Big US IPO, S. Africa Rand Turns 60, Morgan Stanley and Uber Eye Bitcoin, Gold Continues Steady Rise
The Top 5 Emerging Markets Stories - February 14
South Korea’s Coupang to Go Public in U.S IPO
“Coupang Inc., the South Korean e-commerce giant, unveiled its filing for a U.S. initial public offering that is expected to be the largest from a foreign company since Alibaba Group Holding Ltd. ’s blockbuster 2014 debut.”
“The filing reveals a company growing at a rapid clip and with shrinking losses. It generated $12 billion in revenue in 2020, up from $6.3 billion in 2019, while its loss narrowed to $475 million from $699 million.”
“The Seoul company had already filed for the listing privately, as companies tend to do now, and it made the paperwork public Friday. The offering, expected to garner a valuation exceeding $50 billion, could take place as soon as March, according to people familiar with the matter. Alibaba was valued at about $168 billion when it went public.”
“Should Coupang debut next month, it would enter a red-hot IPO market. So far in 2021, $68 billion worth of stock has been sold on U.S. exchanges, far eclipsing all previous year-to-date totals and what has been raised in many full years, according to data from research firm Dialogic,” The Wall Street Journal reports.
At Age 60, South Africa Rand Becomes Emerging Markets Proxy
“For all of South Africa’s economic struggles, the rand looks set to mark its 60th birthday holding fast as the weather vane of emerging-market confidence.”
“The currency — once a global pariah — punches above its weight. The latest Bank of International Settlements global foreign-exchange report, released in April 2019, placed the rand as the 18th most-traded currency in the world, up from 20th in 2016. Daily total turnover for the currency, including spot, forwards, swaps and options, was $72 billion.”
“‘South Africa is one of the successful transformational stories within emerging markets,’ said Sergey Dergachev, senior portfolio manager for emerging market debt at Union Investment in Frankfurt. The perceived stability of the central bank and economic policies have underpinned its attractiveness as a proxy, he said.
“Born on Feb. 14, 1961, the rand was anything but a lovechild. Following decades of fighting the British, white Afrikaner nationalists voted in a referendum to form a republic, which happened in May 1961. The currency became the legal tender as a dual exchange system — a symbol of Afrikaner nationalism — replacing the pound sterling,” Bloomberg reports.
Morgan Stanley Eyes Major Bitcoin Investment
“Morgan Stanley could be moving into the cryptoassets space. According to a Bloomberg report published today, the investment bank’s Counterpoint Global arm is considering investing in Bitcoin.”
“The past few months have seen huge leaps forward in corporate and institutional adoption of Bitcoin and other cryptocurrencies.”
“Morgan Stanley has been edging closer to the booming crypto markets, investing $500 million in MicroStrategy after the business intelligence firm converted its entire cash balance to Bitcoin. MicroStrategy founder Michael Saylor turned his attention to Bitcoin in 2020, and helped kickstart a surge of institutional investment into the asset.”
“Counterpoint Global, the $150 billion wing of Morgan Stanley Investment Management (MSIM), is reportedly looking into making a Bitcoin investment,” Cryptobriefing reports
Gold Seen Steadily Rising This Year, Hong Kong Traders Say
“Gold will continue to rise in the Year of the Ox albeit at a slower pace than the previous two years, aided by low-interest rates, inflationary concerns and the Covid-19 pandemic, according to analysts.”
“The price of bullion in Hong Kong rose 18 per cent in the Year of the Rat to close at HK$17,050 (US$2,200) per tael (37.8 gram) on Thursday, the last trading day before the Lunar New Year holiday.”
“The Year of the Ox is likely to see gold prices rising between 15 and 20 per cent to break through HK$20,000 per tael,” said Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society,” South China Morning Post reports.
Uber Eyes Accepting Bitcoin as Payment
“Uber will start accepting Bitcoin and other cryptocurrencies as a form of payment if it benefits the business and if there is a need for it, the company’s chief executive said.”
“‘Just like we accept all kinds of local currency, we are going to look at cryptocurrency and/or bitcoin in terms of currency to transact,’ Dara Khosrowshahi said in an interview with CNBC.”
“‘That’s good for business. That’s good for our riders and our eaters. That we will certainly look at and if there is a benefit there, if there is a need there, we will do it,’ he added. However, the global ride-hailing giant said it will not buy the digital currency with its own cash.
“‘We are just not going to do it as part of a promotion. It’s a conversation that’s happened that has been quickly dismissed … we are going to keep our cash safe. We’re not in the speculation business,’ Mr Khosrowshahi said,” The National reports.