To paraphrase Mark Twain, the reports of the death of EM bond markets have been greatly exaggerated. Increased global allocations to local EM bond markets have been not cyclical but primarily structural in nature, reflecting these markets’ rising ec...
• Local fundamentals are likely to prevail now that some element of an early tapering of QE is priced in
• We remain Overweight FX and duration on Nigeria on supportive fundamentals and valuations
• We also maintain an Overweight duration stance o...
• Growth momentum in Sub-Saharan Africa remains largely positive, despite uncertainty related to Fed tapering expectations and slowing trend growth in China
• African economies will not be impacted uniformly by a reduction in QE. More liquid marke...
• Prospects in the Sub-Saharan African region remain largely positive, despite uncertainty related to market expectations of Fed tapering, and a slowdown in China’s growth trend to more sustainable levels.
• South Africa is more susceptible to glob...
• This supersedes the version dated 20 June 2013. Changes Ghana FX weighting to Neutral.
• Three sources of vulnerability will add to short-term market volatility: the concentration of foreign holdings, correlation to UST and local-market liquidit...
• Fiscal policy is likely to be constrained in 2013 in a number of Sub-Saharan African sovereigns
• In some countries, debt levels have increased to worrying levels
• Reducing energy subsidies can alleviate the pressure on public finances
• Despite tightening measures, pressure on the currency has persisted
• Planned Bank of Zambia Act to allow the central bank to monitor and better regulate current account transactions
• Exporters may be required to remit earnings back to Zambia
• Sub-Saharan Africa’s growth momentum continues to be robust. New resource discoveries, firm trends in credit growth underscoring domestic consumption, and increased infrastructure investment are all important drivers of the region’s growth trend.
We were impressed by the scale and operations of Konkola and Muliashi mines in Zambia’s copper belt
• Zambia needs to add 300MW grid facility to grow production from the belt to 1.5mt from 1mt now
• We believe Zambia has an exciting future in copp...
• In a surprise development, the Bank of Zambia (BoZ) has announced that it will raise the minimum statutory reserve ratio on both Zambian kwacha (ZMW, formerly ZMK) and foreign currency deposits by 300bps to 8%, from 5% previously, effectiv...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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