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Emerging Markets Daily - February 9
China Blue Chips Hit New High, New Temasek Chief Bullish on China, Global Rebound Could Lift Saudi Stocks, S. Africa Blocks AstraZeneca, Jeff Bezos vs Mukesh Ambani
The Top 5 Emerging Markets Stories - February 9
China Blue Chips Hit 13 Year High - The Standard (Hong Kong)
“China's blue-chip index closed on Tuesday at the highest level in 13 years, Reuters reports.”
“Rare earth stocks rallied, as investors were reassured by a quicker economic recovery following a containment of a resurgence of local coronavirus infections.”
“The blue-chip CSI300 index ended up by 2.19 percent at 5686.25, the highest closing level since January 15, 2008, with its consumer staples sector adding 2.91 percent and the healthcare sub-index climbing by 2.11 percent.”
“The Shanghai Composite index was up by 2.01 percent at 3,603.49, the biggest daily gain in nearly a month. Leading the gains, the rare earth sector sub-index gained by 5 percent, while the natural resource sub-index gained by 4.5 percent,” The Standard reports.
Singapore’s Temasek Upbeat on China Investments - Bloomberg
“Temasek Holding’s newly appointed Chief Executive Officer Dilhan Pillay Sandrasegara said Singapore’s state-owned investment firm is committed to China despite recent developments such as the cancellation of Ant Financial Group’s public listing.”
“‘We’re still very positive on the long-term trajectory of China from what we can see,’ Pillay said, when asked about China Tuesday by reporters after he was named to replace Ho Ching, who will step down in October after 17 years as head of the $230 billion firm.”
“Pillay, currently head of Temasek’s international unit, will need to steer one of the world’s biggest institutional investors through markets buffeted by the coronavirus pandemic and rising political tensions between the U.S. and China.”
“Temasek is a leading investor in China with deals running the gamut from fast-growing startups and technology giants to banking institutions. In September it said holdings in China had surpassed those its home market for the first time, hitting 29% of total portfolio value as it added to assets despite the increased geopolitical tensions. Temasek was also an early investor in fintech giant Ant, whose record initial public offering was scrapped by regulators on the eve of the November listing,” Bloomberg reports.
Saudi Stocks Could Rise on Global Rebound: Julius Baer - Bloomberg
“Investors looking for emerging-market opportunities to capitalize on the expected global economic rebound should take a look at Saudi Arabia’s equities, according to a strategist at Julius Baer Group Ltd.”
“Saudi shares ‘could benefit from the reflation trade, especially with oil moving higher,’ said Mathieu Racheter, an equity strategist for emerging markets at the Swiss firm, which has $486 billion in assets under management.”
“The Tadawul All Share Index has lagged the rebound in the MSCI Emerging Markets Index since last year’s pandemic-spurred rout. Still, it rose for a fourth straight day on Tuesday, climbing to a three-week high as oil headed above $60 a barrel on signs the global market is tightening and demand is improving.”
“Racheter said it wouldn’t be surprising to see some profit-taking in global equity markets after the recent strong gains. ‘But we would see this as a buying opportunity, we would buy in the dip,’ he added,” Bloomberg reports.
South Africa Blocks AstraZeneca Vaccine - African Business
“South Africa has temporarily suspended the use of the Oxford/AstraZeneca vaccine just a week after receiving its first major shipment after new research concluded that the vaccine offers ‘minimal protection’ against mild-to-moderate illness caused by the dominant B.1.351 South African variant found in the country.”
“The suspension, following currently un-peer reviewed research from a relatively small trial of 2,016 patients conducted by the University of the Witwatersrand and Oxford University, is a blow to the continent’s hopes of quickly rolling out the vaccine to overcome the pandemic.”
“AstraZeneca has promised to offer its vaccines at affordable prices for developing world countries, and unlike other vaccines, which require ultra-cold storage unavailable in large parts of the continent, the doses can be stored at normal fridge temperatures.”
“Last week, the WHO reported that the South African variant is believed to have spread to nine other Africa countries. One million doses of the Oxford/AstraZeneca vaccine, produced in India, arrived in South Africa on February 1st, and another half a million were expected later this month,” African Business reports.
Jeff Bezos vs Mukesh Ambani and the India Fall-out - Hindustan Times
“The tussle between two of the world’s richest men -- Jeff Bezos and Mukesh Ambani -- to dominate India’s estimated $1 trillion retail market is testing foreign investor patience with flip-flopping court rulings.”
“This week saw new developments in Amazon.com Inc.’s legal battle to block Ambani’s Reliance Industries Ltd. from acquiring Future Retail Ltd.’s assets, in what would be the country’s largest retail-sector deal. Last week, a single judge at a high court in New Delhi restrained Future Group firms from selling their assets. On Monday, a set of judges at the court overruled that decision. Amazon can appeal the latest ruling in the country’s Supreme Court.”
“The keenly watched case may set an important legal precedent for investors on whether emergency decisions by foreign arbitrators are valid in India. Amazon had petitioned Indian courts with an order from an emergency arbitration court in Singapore that barred Future Retail from making a deal with Reliance.”
“It could also help overseas investors judge the validity of agreements in India, which the World Bank has ranked among the bottom 15% of countries in terms of enforcing contracts, worse than Venezuela, Syria and Senegal,” Hindustan Times reports.