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Emerging Markets Daily - October 13
Be 'Very, Very Vigilant" on Inflation: IMF, China Stocks Rebound, South America's Middle Class Migrants, S. Korea's 'Squid Game' Breaks Records, Tech Giants in Africa
The Top 5 Stories Shaping Emerging Markets from Global Media - October 13
The World Must Be ‘Very, Very Vigilant’ on Inflation, IMF Warns
“The global economy is entering a phase of inflationary risk, the IMF warned on Tuesday, as it called on central banks to be ‘very, very vigilant’ and take early action to tighten monetary policy should price pressures prove persistent.”
“The fund was highlighting the new risks in its twice-yearly World Economic Outlook, which also warned of slipping momentum in global growth after a strong recovery so far this year.”
“Gita Gopinath, the IMF’s chief economist, said the strength of the economic recovery meant it was too early to ‘say anything about stagflation’, despite some supply shortages which have also boosted inflation…”
“The IMF’s central forecast is that inflation will rise sharply towards the end of the year, moderate in mid-2022 and then fall back to pre-pandemic levels. But its report also noted that ‘inflation risks are skewed to the upside’ and advised central banks to act if price pressures showed signs of lasting.” Chris Giles and Kolby Smith report.
China Stocks Rise, Lifted by Consumer and Tech
“China stocks ended Wednesday higher, lifted by consumer and technology stocks, as better-than-expected domestic trade data eased slowdown fears fanned by a power crunch and Evergrande’s debt crisis.”
“The blue-chip CSI300 index rose 1.2%, to 4,940.11 points, while the Shanghai Composite Index gained 0.4% to 3,561.76 points. China’s export growth unexpectedly accelerated in September, as still solid global demand offset some of the pressures on factories from power shortages, supply bottlenecks and a resurgence of domestic COVID-19 cases.”
“Coupled with separate data showing that electricity consumption held up well last month, this suggests that the hit from power rationing has largely been confined to a few energy-intensive industries and did not hold back wider manufacturing activity as many had feared.” Reuters reports.
Newest U.S Border Migrants: South America’s Once Rising Middle Class
Wall Street Journal
“More migrants illegally entering the U.S. to apply for asylum are members of South America’s middle class who fly to the border by plane, according to authorities and aid workers.”
“While the majority of people who come to the U.S. through Mexico are among the world’s poorest fleeing poverty and crime, such as the thousands of Haitians who recently formed a makeshift camp in Del Rio, Texas, the growth in middle-class migrants reflects continued hardship in nations such as Brazil and Venezuela from the Covid-19 pandemic and associated economic downturns, as well as political instability…”
“The arrival of more-affluent migrants indicates that the pandemic and its economic aftershocks are pushing some people to seek refuge in the U.S. who likely wouldn’t have come in the past. ‘The global recession really made people lose hope,’ said Andrew Selee, president of the Migration Policy Institute, a nonpartisan Washington think tank. ‘It’s a big deal to go from being middle class in your country to be undocumented in the United States.’”
“South America and the Caribbean last year lost about 26 million jobs—the biggest economic contraction of any region in the world, according to the International Monetary Fund. And Brazil recently surpassed 600,000 Covid-19 deaths, second in the world only to the U.S., according to Johns Hopkins University data.” Alicia A. Caldwell reports.
South Korea’s ‘Squid Game’ Breaks Netflix Record
“Netflix Inc. said South Korean show ‘Squid Game’ has become its biggest series launch ever, beating high-profile American productions, as the dystopian drama becomes an unexpected global sensation.”
“‘Squid Game’ has attracted 111 million views since its release on Sept. 17, Netflix said in a tweet on Wednesday. That surpasses its previous top show, ‘Bridgeton,’ which hit 82 million households in its first 28 days of release.”
“‘Squid Game’ -- about a group of debt-laden Koreans who enter a survival game akin to the ‘Hunger Games’ in hopes of a massive cash prize -- is proving as popular with investors as it is with viewers. It helped Netflix’s stock reach a record earlier this month, with shares surging 6% since the show’s release. The series’s popularity has also fueled a rally of related Korean entertainment stocks.”
“The show’s success is a milestone for Netflix, which has been stepping up investment in fast-growing Asian markets -- particularly South Korea -- by producing original content, acquiring studios and establishing talent training bases as growth in the U.S. market slows. Still, it’s set to face increasing challenges as rivals including Walt Disney Co. and Chinese technology giant Tencent Holdings Ltd. double down on investing in their streaming platforms in Asia.” Shirley Zhao reports.
Tech Giants in a New Scramble for Africa Markets
The East African
“Africa’s internet market is up for a major scramble as global tech corporations rush to invest hundreds of billions of shillings, in the hunt for millions of Africans expected to join the online community over the next decade.”
“Last week, global internet giants Google and Facebook laid down their infrastructure investment strategies in plans that will see hundreds of billions poured into the continent in the coming years.”
“As Google said it will be investing about Sh110 billion ($1 billion) in Africa over the next five years, Facebook was revealing the different technologies it has created to ensure that it reaches all corners of the continent, through its Inside the Lab programme targeting to get a billion extra users on its platforms.”
“The pair has spent billions to create subsea cables connecting up to three continents, investments that are targeted to boost connectivity in Africa by at least three times internet quality compared to current levels, cut down prices and subsidise prices for devices used to access the web.” Peter Mburu reports.
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