EM stocks, bonds tank on political, economic worries

It hasn’t been a good month for emerging-market assets: Political instability in several countries has combined with ongoing economic challenges this month to send emerging-market bonds and stocks on track for their worst month since last September, Bloomberg reports. A surprise election in Argentina and the assassination of a presidential candidate in Ecuador as well as China’s economic struggles and surging US treasury yields have sent bonds sliding and stocks poised for their worst August since 2015. Currencies, meanwhile, have seen almost all of their 2023 gains erased, according to an MSCI gauge.

ALSO WORTH KNOWING-

• Turkey is taking the guardrails off the TRY: Turkey’s central bank has begun unwinding measures introduced last year to defend the TRY which are estimated to have cost the government and banks USD 20 bn this year alone. This comes as the central bank continues its pivot away from President Erdogan’s unorthodox monetary policies. (Bloomberg | Financial Times)
• Beijing to banks: Lend more, defuse debt bomb. China’s central bank and financial regulators have appealed to the country’s banks to ramp up lending in a bid to prop up the country’s stumbling economy. (Bloomberg)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 1.6 bn (21.2% below the 90-day average). Regional investors were net buyers. The index is up 23.5% YTD.

In the green: TMG Holding (+3.3%), Eastern Company (+2.9%) and Beltone Financial Holding (+2.3%).

In the red: Mopco (-1.2%), B Investments Holding (-1.2%) and Elsewedy Electric (-1.0%).

Most markets in Asia have started the week in the red, as concerns about the health of the Chinese economy persist. The Nikkei and the Kospi are the two outliers, seeing slight gains this morning. Most European stock futures are currently in the red while US markets are on course to rise at the opening bell later today.