Emerging Markets Daily - January 28
Asia Stocks Fall, EM Bonds Sizzle, Indonesia FinTech, Russian Digital, and Abu Dhabi Market Cap
The Top 5 Emerging Markets Stories - January 28
Hong Kong, China Stocks Join Global Sell-Off - South China Morning Post
“Hong Kong and mainland China stocks slumped, joining the sell-off in global markets as the ongoing coronavirus pandemic weighs on the financial results of the world’s companies from Facebook to Tesla.”
“The Hang Seng Index fell 2.6 per cent to 28,550.77 for a third day of declines, slipping from a 31-month high. The Shanghai Composite Index retraced 1.9 per cent to 3,505.18 while the benchmark in southern China’s technology hub Shenzhen fell 2.8 per cent to 2,352.75.”
“Asia-Pacific markets fell across the region as soon as trading commenced, taking their cues from the 2.6 per cent decline overnight in the S&P 500 and the Nasdaq index. European stocks fell by the most in five weeks, with the UK unveiling new rules to contain the spread of Covid-19 and Germany lowering its projection for economic growth in 2021,” South China Morning Post reports.
Emerging Markets Bonds Sizzle, Set to Break Record - Financial Times
“When Saudi Arabia announced it would sell $5bn of international bonds this week, investors scrambled for a piece of the action.”
“The gulf nation drew in around $20bn of orders for its 12 and 40 year bonds, helping it reduce the borrowing costs it paid on the debt, people familiar with the matter said.”
“Saudi Arabia’s feat is just the latest in a string of successes for emerging-market borrowers, who have rushed to tap international capital markets this year in an attempt to lock in low interest rates. Governments and companies in the developing world sold $112.57bn of international bonds in the first 26 days of 2021, just below the all-time monthly record of $112.78bn set last January, according to Bond Radar data stretching back to 2003. The final three days of the month are likely to tip the final tally over the threshold, analysts said,” Financial Times reports.
Sea and Gojek Make Big Fintech Plays - Singapore Straits Times and Bloomberg
“Sea Ltd and Gojek are snapping up Indonesian lenders, betting they can make headway into one of the world's largest unbanked markets.
“The buying spree is set to continue as financial technology firms set their sights on the nation’s more than 175 million internet users, many of whom rely on online banking services. Sea has purchased PT Bank Kesejahteraan Ekonomi this year, while Gojek made its biggest fintech investment by spending about US$160 million (S$212.9 million) to boost its stake in PT Bank Jago in December.”
“While Indonesia is by far the largest fintech market in South-east Asia, it's one of the few that don't license digital-only banks. The UK, Hong Kong and Singapore have allowed virtual lenders, while neighboring Thailand and the Philippines are actively studying the matter. That means acquisitions are the only way into Indonesia and the Financial Services Authority is pushing for more consolidation among its more than 1,600 commercial and rural banks in lieu of issuing new licenses,” Bloomberg and Singapore Straits Times reports.
Top Private Equity Shop Targets Russia Digital Firms - Moscow Times
“Leading private equity firm Elbrus Capital has attracted $260 million to launch a new investment fund focusing on Russian digital companies, business daily Kommersant reported.”
“It will be the third fund launched by Elbrus — an investment house specializing in tech firms from Russia and other ex-Soviet countries. The company is aiming to raise a total of $600 million by the end of 2022 to pump into technology firms.”
“Some of Elbrus’ most successful investments include job search portal HeadHunter, which launched on the U.S. Nasdaq exchange in 2019, Cian Group, a leading real estate online database which is eyeing an initial public offering (IPO) next year, and PickPoint, Russia’s leading network of collection points for e-commerce orders,” Moscow Times reports.
Abu Dhabi Aims to Double Its Market Capitalization - The National
‘The Abu Dhabi Securities Exchange plans to double its market capitalisation over the next three years through its new ‘ADX One’ strategy, which aims to increase market liquidity and improve market efficiency.”
“Exchange bosses said they expect ten new listings this year, its 20th anniversary year, as well as new services such as derivatives trading.”
“‘ADX today is one of the most competitive exchanges in the region, providing an exciting value proposition for companies and some of the highest dividend yields in emerging markets for investors,’ the exchange's chairman Mohammed Al Shorafa said in a statement on Wednesday,” The National reports.