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Emerging Markets Daily - Sept 24
India's Booming Stocks, Abu Dhabi Seeks Turkey Investments, China Bans Crypto, Evergrande Misses Bond Payment, Container Shipping Rates Stabilize
The Top 5 Stories Shaping Emerging Markets from Global Media - Sept 24
India Stocks Boom, Sensex Hits Record 60,000 Mark
“India's benchmark Sensex crossed the 60,000 level for the first time on Friday, driven by tech and private bank stocks, as analysts pointed to easing fears over economic damage from a possible third COVID-19 wave.”
“The blue-chip NSE Nifty 50 index (.NSEI) rose 0.59% to 17,928.95 by 0502 GMT, after hitting a record high earlier in the session, while the benchmark S&P BSE Sensex (.BSESN) was up 0.67% at 60,285.25.”
“Indian shares were headed for their fifth straight weekly gain, as analysts said a quick-moving vaccination campaign had diminished fears of a further hit to the economy due to the pandemic.”
“Concerns about the fallout from debt-ridden property developer China Evergrande (3333.HK) were also somewhat mitigated, while a U.S. Federal Reserve meeting did not throw up any surprises, said Narendra Solanki, head of equity research at Anand Rathi Investment Services.”
“In Mumbai trading, tech stocks (.NIFTYIT) jumped as much as 2.7% to a record high, with HCL Technologies (HCLT.NS) rising over 3% to be among the biggest gainers on the Nifty 50. Upbeat outlooks from U.S. peers Accenture (ACN.N) and Salesforce (CRM.N) helped bolster gains on Wall Street overnight.” Reuters reports.
Abu Dhabi Wealth Funds Scout Turkey for Billions in Investments
“Wealth funds in Abu Dhabi are on the prowl in Turkey, scouting for targets for billions of dollars in investments, according to people familiar with the matter.”
“Talks between the funds from the oil-rich capital of the United Arab Emirates and companies in Turkey have been ongoing for months, the people said. The interest preceded a breakthrough phone conversation in August between Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan and Turkish President Recep Tayyip Erdogan, amid increasing signs of a thawing of relations.”
“The investment discussions provide further evidence of a turnaround in ties between the two countries that have been at loggerheads for much of the past decade over everything from Islamist movements to the conflicts in Syria and Libya. Possible deals could revive an investment pipeline that sputtered amid longstanding tensions stemming from Turkey’s support for the Muslim Brotherhood, an Islamist group banned in the UAE. Relations reached a nadir in 2016 when Turkish state media accused the UAE of supporting a coup attempt against Erdogan.”
“Among funds eyeing Turkish investments in recent weeks are Abu Dhabi Investment Authority, or ADIA, the emirate’s biggest wealth fund that’s amassed assets estimated at $686 billion, and ADQ, according to three people. ADQ alone is considering spending as much as $1 billion on health-care and fintech targets, one of the people said. With an estimated $110 billion in assets, ADQ is the emirate’s third-largest sovereign wealth fund after ADIA and Mubadala Investment Co.” Bloomberg reports.
China Bans All Crypto Transactions in Toughest Crackdown Yet
Wall Street Journal
“China’s central bank said all cryptocurrency-related transactions are illegal, reinforcing the country’s tough stance against digital rivals to government issued money.”
“In a statement posted on its website on Friday afternoon, the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.”
“Cryptocurrencies weakened following the statement. The price of bitcoin fell more than 8%, compared with its level at 5 a.m. ET Thursday, before paring some of those losses. The cryptocurrency fetched just under $41,370 per bitcoin, according to CoinDesk. Ether tumbled more than 11% to trade at about $2,795.”
“Naming bitcoin, ether and tether as examples, the central bank said cryptocurrencies are issued by nonmonetary authorities, use encryption technologies and exist in digital form and shouldn’t be circulated and used in the market as currencies.” Elaine Yu and Joe Wallace report.
China Evergrande Misses Bond Payment Deadline
“China Evergrande Group, the world's most indebted property developer, inched closer to its maiden bond default after it failed to make a coupon payment as scheduled to at least some investors, two people familiar with the matter said.”
“Evergrande, which is running out of cash and owes funds to staff, contractors, suppliers, banks and buyers of investment products, was due to pay $83 million in interest to holders of an offshore dollar bond on Thursday.”
“Two investors said the deadline of midnight New York time had passed without any notice from Evergrande, but the company has a 30-day grace period to send the funds before it is officially in default.”
"‘We will reach out to the company to understand their plans,’ one said. ‘They still have the grace period and we note reports that Chinese regulators have told the company not to default on dollar bonds.’”
“The company also owed 230 million yuan ($35.6 million) in interest on a domestic bond on Thursday. It said it had "resolved" the matter with bondholders, without giving details.” Nikkei Asia reports.
Container Shipping Rates Stabilize After 22 Weeks of Increases
Sea Trade Maritime News
“Container freight rates have stabilised after 22 consecutive weeks of rises based on Drewry’s World Container Index (WCI). The WCI published on 23 September remained steady at $10,377.19 per feu, the same level as the week before, however, up 299% year-on-year.”
“‘This comes following the announcement by CMA-CGM and Hapag-Lloyd to put a halt in increment of spot rates as container prices on most trade lanes are at record highs,’ Drewry commented.”
“For Shanghai – Los Angeles the rate remained flat at $12,424 per feu, while Shanghai – Rotterdam saw a marginal $62 increase to $14,356 per feu. Drewry said that year-to-date the WCI was up $6,888 per feu.”
“Looking ahead it said: Drewry expects rates to remain steady in the coming week.” Marcus Hand reports.
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