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MOSCOW: Stiff new US sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology. Western sanctions imposed in 2014 over Russia’s annexation of Crimea have already made it extremely hard for […]
KUALA LUMPUR (Aug 17): Malaysia’s ringgit drops for a ninth week, the longest losing streak in almost three years, as geopolitical tensions weigh on emerging-market assets. GDP for 2Q will be published at noon. * USD/MYR has gained 0.4% this week to 4.1030 after reaching 4.1055 on Thursday, highest since November; pair is little changed Friday ** Support 4.0443, 4.0413, 4.0083; resistance 4.1093, 4.1230, 4.1355 * U.S. Treasury Secretary Steven Mnuchin said on Thursday Turkey would face more sanctions if it doesn’t release a detained American pastor * Risk appetiteRead More
LONDON: Investors rattled by events in Turkey, China and South Africa have pulled US$1.3 billion (RM5.3 billion) out of emerging market stocks in the last week and US$100 million from bonds, according to the Institute of International Finance (IIF), which tracks financial flows.
An emerging market selloff has picked up pace over the last week as concerns about Turkey and others have compounded longer-term worries about a global trade war, a strong dollar and rising borrowing and energy costs.
The Washington-based IIF said the exodus of investment money this week has largely been concentrated in South Africa and China, amounting to US$600 million and US$500 billion, respectively.
However, India has also turned negative this week as debt flows reversed, and Malaysia, Indonesia, Korea, the Philippines, Korea and Vietnam have all seen money leave, albeit at moderate pace.
“Turbulence, amid heightened tensions between the US and Turkey, has clearly weighed on investor appetitive for emerging market assets,” the IIF said in a new report.
South Africa's reliance on portfolio debt and equity flows to finance its large and widening current account deficit has amplified its moves, it added.
Nearly 80% of foreign investor flows to South Africa since 2015 have been in the form of portfolio investment – buying assets like bonds or shares. Direct investment, such as building a factory, accounted for less than 10% of total
“The impact of market strains is likely to be most acute for countries with relatively large external financing needs,” the IIF said.
Thailand, Qatar and Brazil were the only countries in its sample group that saw money come into their asset markets over the last week, while the wider selloff had not been as severe as when US-China trade tensions first erupted, it added. – Reuters
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KUCHING: RAM Ratings has reaffirmed the rating of the Sabah’s RM1.0 billion Bonds (2014/2019) at AAA/stable. The rating is based on the Constitution of Malaysia’s requirement that any state government borrowing be subject to the approval of the Federal Government. “Although we do not consider federal government approval to be a direct guarantee, such an […]
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