The international sovereign bonds of a number of promising markets witnessed extensive sales again today, Wednesday, after large customs customs duties, imposed by US President Donald Trump, entered into force.
The entry of fees – which includes 104% on China – has a wave of turmoil in global markets.
- Data showed that long -term bonds denominated in dollars for Pakistan fell more than five cents to decline to less than 70 cents, a separation limit that the debt is considered a stumbling after.
- Market dealers stated that Sri Lanka, Nigeria and Egypt bonds fell between 3.5 and 4.5 cents despite the weak trading.
Religion has suffered in the smaller emerging markets, known as promising markets, from severe sales waves, since Trump announced a series of comprehensive customs duties last Wednesday, and has lost many bonds in the assets category 10 cents or more last week.
The latest decline led to a sharp increase in the cost of borrowing these economies, as many bonds witnessed revenues in the category of dozens, a threshold that makes it difficult for these economies to benefit from international capital markets.
“There are some concerns in the market that promising markets find more difficulty in the future in collecting external financing due to the foreign market developments, and perhaps the continuous decline in the appetite of the risk,” said Jerley Orumusi, the chief strategy of the promising markets of Societe General.
He added that this may lead to more weakening of the currency in those economies in the medium term, and reduce the space available to central banks to reduce interest rates to support their economies.
Radia Khan, head of the Research Department in Africa and the Middle East at Standard Chartrad, said that the latest group of customs duties raised more concerns about global growth, said Radia Khan, head of the Research Department in Africa and the Middle East at Standard Charterd.
“The promising markets, especially at the lower side of credit ratings, are more at risk when the market is dominated by the morale of avoiding risk,” she added.
