Emerging Markets Daily - January 25
The Top 5 EM Stories of the Day
The Top 5 Emerging Markets Stories - January 25
Tencent Nears $1 Trillion Market Cap as Hang Seng Rallies - South China Morning Post
“Hong Kong stocks climbed to near a 21-month high, adding to the market’s best start to the year since 1985. Tencent Holdings, the world’s sixth largest company, surged to record, minting HK$724.4 billion (US$93.5 billion) of new wealth in a single day.”
“The Hang Seng Index rose 2.4 per cent to 30,159.01 on Monday. The index has appreciated 10.8 per cent this year to the highest level since May 2019. The Shanghai Composite Index gained 0.5 per cent to 3,624.24, the highest since December 2015.”
“Tencent paced index members, surging 10.9 per cent to HK$766.50. The WeChat operator has now sprinted to a 35.9 per cent gain this month alone, pushing its capitalization to US$948.7 billion. It surpassed electric-car maker Tesla in value on January 15, and is now within 5.5 per cent of breaking into the five-member exclusive club of US$1 trillion companies, according to Bloomberg data,” South China Morning Post reports.
South Africa Stocks Hit New Record, Fueled by Naspers - Bloomberg
“South Africa’s main stocks index jumped 2.1% as of 10:07 a.m. in Johannesburg, setting a fresh intraday record, as Naspers Ltd. was lifted by a surge in partly owned Chinese online giant Tencent Holdings Ltd. Retailer Woolworths Holdings Ltd. was also among the leading gainers, soaring the most since 1998 after an upbeat trading statement.”
“Asian stocks and U.S. and European equity futures rose Monday as investors focused on the prospect of additional fiscal stimulus and supportive Federal Reserve policy amid the worsening pandemic.”
“Naspers advanced as much as 8.1%, the most in 10 months, to a new all-time high as Tencent jumped 11% in Hong Kong, the most since 2011. Naspers subsidiary, Prosus NV, which holds the company’s 31% stake in Tencent, climbed 7.4% to the highest level since the company was carved out of the tech investor in September 2019,” Bloomberg reports.
Emerging Markets Look to Fed For Fresh Bounce - Bloomberg
“Traders are likely putting their trust in the Federal Reserve to provide the next spur to an emerging-market rally that may be showing signs of fatigue.”
“With Friday’s declines delivering a week-ending jolt to the bulls, some of the warning signs took on a more worrying look. The Bloomberg Barclays local-currency bond index registered its first back-to-back weekly drop since June. Bloomberg’s Fear-Greed indicator for the MSCI developing-nation stock gauge -- which measures selling strength versus buying strength -- climbed to its highest in almost a decade, a sign that gains may have been excessive. And a basket of currencies had its worst week since the end of October.”
“Which is why an assurance from the Fed on Wednesday that it will keep the stimulus spigot open via an unaltered bond-buying program could be enough to comfort investors concerned about the delays to a global recovery,” Bloomberg reports.
Cryptocurrency rising in EM as hedge against national economic health - TechCrunch
From Brazil to Nigeria, people turn to Bitcoin for different reasons than most of their speculating counterparts in North America. Namely, because it’s the most advantageous way for them to conduct international transactions.
Global demand for Bitcoin has been surging since the pandemic began in 2020, pushing dollar-denominated prices briefly past $34,000 during the first week of January, 2021. For residents in many emerging markets, demand for Bitcoin is driven by concerns about the overall health of their national economies, not pure speculation. Some of these countries where Bitcoin markets are spiking, especially in Latin America and the Middle East, are seeing their domestic economies tailspin and are worried political controls could further threaten economic stability.”
“For example, since Western Union stopped operating in Cuba, more Cubans are using Bitcoin than ever before. For people in a variety of countries, pandemic policy changes reduced access to the dollar-centric financial system,” TechCrunch reports.
India Markets Partly Recover After Friday Correction - Reuters
“Indian shares edged up on Monday, as gains in banking stocks outweighed a slide in Reliance Industries, triggered by a sharp drop in third-quarter revenue at the conglomerate’s oil-to-chemicals business…”
“On Friday, Indian shares ended lower, retreating from record levels hit in the previous session due to weakness in banking and metal stocks.”
“Billionaire Mukesh Ambani-led Reliance Industries slipped as much as 4.7% in morning trade, marking its biggest intra-day percentage loss in over a month and was the biggest drag on the blue-chip Nifty 50.”
“The operator behind the world’s largest refining complex reported a 30% drop in its oil-to-chemicals division, but beat profit estimates for the third quarter as it reined in spending,” Reuters reports.