{"id":598081,"date":"2019-05-14T03:31:39","date_gmt":"2019-05-14T03:31:39","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2019\/05\/14\/global-market-turmoil-sends-investors-fleeing-emerging-market-shares-and-currencies\/"},"modified":"2019-05-14T03:31:39","modified_gmt":"2019-05-14T03:31:39","slug":"global-market-turmoil-sends-investors-fleeing-emerging-market-shares-and-currencies","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2019\/05\/14\/global-market-turmoil-sends-investors-fleeing-emerging-market-shares-and-currencies\/","title":{"rendered":"Global market turmoil sends investors fleeing emerging market shares and currencies"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-01\"><\/a> <b>Turmoil in global markets had investors fleeing EM and other so-called \u201crisky\u201d assets<\/b> yesterday. Shares in developed markets also took it on the chin after China said it would <a href=\"https:\/\/www.bbc.com\/news\/business-48253002\">hike tariffs<\/a> on some US 60 bn worth of US imports. Beijing was reacting to Washington\u2019s decision last week to impose new duties on some USD 200 bn worth of Chinese imports.<\/p>\n<p><b>The EGX30 closed down 1.5% yesterday<\/b> in moderately heavy trading (by Ramadan standards) \u2014 total turnover came in at EGP 686 mn, or about 43% higher than the average since 2 May. US markets had their worst day of the year so far, with the S&P 500 down 2.4% and Nasdaq off 3.4%. European markets also closed in the red yesterday, while <b>the FTSE All World Index was off 1.9%<\/b>, sliding to its lowest level since March.<\/p>\n<p><b>Asian shares were still sliding at dispatch time this morning in heavy trading<\/b>, with equities in Japan, China, Hong Kong, Korea, India, Australia and New Zealand all in the red.<\/p>\n<p><b>Emerging-market currencies got whacked:<\/b> The MSCI EM currency index fell 0.5% to its lowest level since January early yesterday morning on concerns about what the trade dispute could mean for global economic growth, <a href=\"https:\/\/www.ft.com\/content\/a0e18046-7551-11e9-bbad-7c18c0ea0201\">the FT reported<\/a>. And JPMorgan shifted its position on EM currencies to a small underweight in response to the breakdown in talks, <a href=\"https:\/\/in.reuters.com\/article\/emerging-jpmorgan\/jpmorgan-cuts-emerging-markets-risk-after-u-s-china-trade-setback-idINKCN1SJ0OF\">Reuters says<\/a>. \u201cA change of course in trade negotiation is against consensus and <b>warrants reducing EM risk further given overweight positions<\/b>,\u201d analysts said in a note.<\/p>\n<p><b>The \u201cfear index\u201d jumped 30% yesterday. <\/b>The Cboe Volatility Index, or VIX, \u201ctends to rise when stocks are falling and is one of several measures showing that heightened jitters are creeping through markets, with investors expecting big swings ahead,\u201d the <a href=\"https:\/\/www.wsj.com\/articles\/fear-flares-up-as-investors-brace-for-more-market-volatility-11557772677?mod=hp_major_pos19\">Wall Street Journal<\/a> noted. Meanwhile, Morgan Stanley\u2019s chief equity strategist (who correctly called the global equities sell-off of last year) says the state of affairs between the US and China has <b>increased the likelihood of a prolonged economic downturn<\/b> \u2014 and, possibly, of a recession, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-05-13\/recession-bell-rings-in-trade-spa\">Bloomberg<\/a> notes.<\/p>\n<p><b>Keep an eye on the robots:<\/b> As we <a href=\"https:\/\/enterprise.press\/stories\/2019\/05\/13\/what-were-tracking-on-13-may-2019\/\">noted yesterday<\/a>, there is a risk that \u201ccomputer driven funds [that] amassed big equity positions while markets were sleepy\u201d could suddenly be \u201cscrambling to sell their stocks and move into safer assets like treasuries\u201d now that market volatility is back on the menu. See this <a href=\"https:\/\/www.wsj.com\/articles\/volatility-could-cause-more-pain-as-funds-betting-on-quiet-sell-down-stocks-11557658823\">Wall Street Journal<\/a> piece for more \u2014 and remember that as much as <a href=\"https:\/\/www.zerohedge.com\/news\/2018-10-24\/jpmorgan-warns\">USD 7.4 tn in stocks could be \u201csubject to forced selling<\/a> by passive funds during a sharp, prolonged downturn.<\/p>\n<p><b>And on monetary policy: <\/b>With no analyst willing to stick her neck out and prognosticate about when calm might be restored to markets, there is the chance that \u201cfurther escalation in trade tensions could dent growth to the point where central banks consider taking additional steps to ease monetary policy,\u201d the <a href=\"https:\/\/www.wsj.com\/articles\/global-stocks-stumble-on-renewed-trade-anxiety-11557734434\">WSJ<\/a> notes.<\/p>\n<p><b>So it\u2019s the end of the world, right? <\/b>Probably not. As he often does, Mohamed El Erian serves as the voice of reason, <a href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2019-05-12\/china-u-s-trade-ambiguity-is-inconvenient-reality-for-investors\">writing for Bloomberg<\/a> that a trade pact between the US and China is the most likely outcome. (With the caveat that tensions are less likely to dissipate the longer it takes them to agree to terms.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Turmoil in global markets had investors fleeing EM and other so-called \u201crisky\u201d assets yesterday. Shares in developed markets also took it on the chin after China said it would hike tariffs on some US 60 bn worth of US imports. Beijing was reacting to Washington\u2019s decision last week to impose new duties on some USD [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8572],"tags":[116,115,72,119,2380,11213,117,4760],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-598081","post","type-post","status-publish","format-standard","hentry","category-speed-round","tag-china","tag-emerging-markets","tag-enterpriseam","tag-financial-markets","tag-speed-round","tag-trade-dispute","tag-us","tag-vix","wpautop","entry"],"acf":{"mongo_id":"2d7832a7-3a74-4785-8947-95b033022af3","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[598076],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Global market turmoil sends investors fleeing emerging market shares and currencies - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2019\/05\/14\/global-market-turmoil-sends-investors-fleeing-emerging-market-shares-and-currencies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Global market turmoil sends investors fleeing emerging market shares and currencies\" \/>\n<meta property=\"og:description\" content=\"Turmoil in global markets had investors fleeing EM and other so-called \u201crisky\u201d assets yesterday. 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The EGX30 closed 0.55% in the green, led by\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/3\/36.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":549709,"url":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/27\/everything-must-go\/","url_meta":{"origin":598081,"position":1},"title":"Everything must go","author":"enterpriseam admin","date":"27 September 2022","format":false,"excerpt":"Everything but the greenback is selling off right now: Stocks, bonds, commodities and currencies around the world came under pressure yesterday as tightening financial conditions and the relentless rise of the USD raise fears of recession and destabilize currencies in markets both developed and emerging.A snapshot: USD soars: The USD\u2026","rel":"","context":"In &quot;PLANET FINANCE&quot;","block_context":{"text":"PLANET FINANCE","link":"https:\/\/enterpriseam.com\/egypt\/planet-finance\/\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":595910,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/08\/14\/what-were-tracking-on-14-august-2019\/","url_meta":{"origin":598081,"position":2},"title":"What we\u2019re tracking on 14 August 2019","author":"enterpriseam admin","date":"14 August 2019","format":false,"excerpt":"We\u2019re back, ladies and gentlemen. The domestic news cycle during Eid vacation was predictably slow. Thankfully, we\u2019ve been bestowed with arguably two of the year\u2019s most significant stories \u2014 the release of July\u2019s stunning inflation figures and Fawry\u2019s debut on the EGX \u2014 inside a single issue. We cover both\u2026","rel":"","context":"In &quot;What We're Tracking Today&quot;","block_context":{"text":"What We're Tracking Today","link":"https:\/\/enterpriseam.com\/egypt\/category\/what-were-tracking-today\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":590442,"url":"https:\/\/enterpriseam.com\/egypt\/2023\/07\/19\/beltones-record-egp-10-bn-capital-increase-closes-sees-foreign-institutions-take-stakes\/","url_meta":{"origin":598081,"position":3},"title":"Beltone\u2019s record EGP 10 bn capital increase closes, sees foreign institutions take stakes","author":"enterpriseam admin","date":"19 July 2023","format":false,"excerpt":"Second phase of rights issue was c. 5.5x oversubscribed","rel":"","context":"In &quot;Capital markets&quot;","block_context":{"text":"Capital markets","link":"https:\/\/enterpriseam.com\/egypt\/category\/industries\/capital-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2023\/7\/800.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":570733,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/04\/13\/banque-du-caire-postpones-ipo-on-market-turmoil-chairman\/","url_meta":{"origin":598081,"position":4},"title":"Banque du Caire postpones IPO on market turmoil -chairman","author":"enterpriseam admin","date":"13 April 2020","format":false,"excerpt":"IPO WATCH- Banque du Caire postpones IPO on market turmoil, chairman confirms: State-owned Banque du Caire (BdC) has shelved plans to debut 20-30% of its shares on the EGX in April thanks to fallout from the covid-19 pandemic, Chairman Tarek Fayed confirmed to Al Masry Al Youm in an interview\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":570018,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/03\/16\/egx30-tumbles-9-3-in-worst-showing-since-2012\/","url_meta":{"origin":598081,"position":5},"title":"EGX30 tumbles 9.3% in worst showing since 2012","author":"enterpriseam admin","date":"16 March 2020","format":false,"excerpt":"EGX30 tumbles 9.3% in worst showing since 2012: The EGX30 caught up yesterday with last week\u2019s turbulence across global financial markets, closing down 9.3% in what was its sharpest one-day decline since November 2012. Index heavyweight CIB closed down 9.9%. 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