Emerging Markets Newsletter

Semester 1 Week 7

Hey Legend!

Happy Monday and welcome to Week 7! 🥳

Midsems are in full swing, time flies ✈️ when you're cramming lectures you swore you'd watch in Week 2 💀

God gives the toughest tribulations 🪖 to his most caffeinated soldiers ⚡, lock in, one more week before mid-sem break hits 🎉✨

Thank you to everyone who popped by our coffee catchup ☕last Thursday! It is always a treat to see our amazing members 💚

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The Numbers

Markets surged this week, led by a sharp rebound in the S&P 500 and strong gains in gold, emerging markets, and Bitcoin. Year-to-date figures still show poor results across asset classes, except gold which maintains consistent, strong growth.

The Roundup

Rising trade tensions and crippling heatwaves strain India’s economy, China holds firm against U.S. pressure as the Yuan hits historic lows — and Africa sees steady growth amid global headwinds.

India

India battles economic headwinds as U.S. trade tensions escalate — the RBI slashes rates to 6% to spark growth, while markets stumble for a second week. Pharma exports face a major blow with looming U.S. tariffs. On the ground, deadly heatwaves and storms wreak havoc in the north.

• India's Finance Minister Nirmala Sitharaman said her country's economy - hit by U.S trade tariffs - will need help from the RBI and the government🙏💵 . The RBI's Monetary Policy Committee cut its repo rate for a second consecutive time by 25 basis points to 6.00% 📉 as it seeks to boost a sluggish economy in the face of U.S. President Donald Trump's change in trade policy ⚔️ 🪙 .

• India's benchmark equity indexes fell for the second consecutive week as investors grappled with uncertainty triggered by U.S. President Donald Trump's trade policy flip-flops ⬆️ ⬇️📉 . Nine of the 13 major sectors fell during the week, with real estate and metals leading the losses, down 4% and 2.9%, respectively 🏡 🏭.

• US President Donald Trump said that Washington is planning to announce a "major" tariff on pharmaceutical imports soon 💊. India's pharmaceuticals sector, one of the most dependent domestic industries on trade with America, could be significantly impacted by the move 💰. In FY 24, of India's $27.9 billion worth of pharma exports, 31 per cent or $8.7 billion were to the US 👀 🗡️⚔️️.

• Northern India has been experiencing extreme heat this week as temperatures topped 40C (104F) 🔥 . The extreme early heat triggered severe thunderstorms across Bihar ☔️ ⛈️️. At least 19 people have died in the past two days amid frequent lightning and strong winds 💨 . There was extensive damage to crops – including wheat, mango and lychee – weeks before the harvest 🌾 🥭 .

China

This week, concerns mount over possible Chinese involvement in the Russian-Ukraine war; Canberra rejects Chinese attempts to join forces to deter American tariffs, while markets feel the chaotic aftermath of the full-scale economic war between Beijing and Washington.

• China slams President Trump's decision to increase tariffs on Chinese goods to 145% as a “joke” 🤡, increasing duties on American goods to 125% and instituting import restrictions on Hollywood movies🎬🚫 in retaliation. The spiralling trade war threatens to gut trade between the two largest global economies📊🌏 as soaring tariffs become an unsustainable burden for consumers 🛒😰 and businesses 🏭🚨.

• The Chinese Yuan fell to record lows against the US dollar💵 and trading partner currencies💱. To cushion the economic blow from American tariffs, the PBoC 🏦 allowed a gradual depreciation 📉 in the Yuan to boost China’s export competitiveness 📦📈. However, it stopped short of a sharp devaluation, urging state banks to offload US dollar purchases to contain market volatility📊🔒.

• Australia rejects China's offer to “Join Hands” and counter American tariffs. Deputy Prime Minister Richard Marles rebuffed🙅‍♂️ Ambassador Xiao Qian's proposal 📝 that "the only way to stop the hegemonic and bullying behaviour of the US” was to “jointly resist”, stating Australia would not be “holding China's hand”🚫🤝; leaving Beijing to look elsewhere for support.

• Chinese soldiers in Ukraine! Ukrainian President Volodymyr Zelenskyy revealed that as many as 155 Chinese nationals are fighting for Russia 🪖following the capture ⛓️ of 2 Chinese citizens in the Donetsk Oblast. The revelation puts Beijing in a political quagmire 😬 with its close ties to Moscow at odds against its neutral stance ⚖️ in the Russia-Ukraine war 💥 ⚔️.

Africa

Africa is staying steady on the path to growth. Inflation is cooling, infrastructure projects are booming, and Sub-Saharan Africa is expected to grow by 4.1% in 2025. But it's not all smooth sailing — global trade tensions, especially with the US, and ongoing conflicts like in Sudan are shaking things up.

• The Africa Finance Corporation (AFC) just hit a major milestone — over $1 billion in revenue for 2025! 🔥 That’s a 22.8% jump from last year. The boost came from big projects like the Lobito railway (linking Angola, Zambia, & DRC) and green energy moves like the Morocco-UK Power Project ⚡. This shows Africa can lead its own development 💪🏾.

• Sub-Saharan Africa is expected to grow by 4.1% in 2025, thanks to better inflation and major infrastructure investment 🚧. Ethiopia is leading with a hot 7.8% growth forecast 🔨🏭. Kenya is next with 5.3%, boosted by real estate and power💡. South Africa is struggling though, at just 1.9% 😬 — global issues and new US tariffs are weighing things down.

• Finance is flying this week. AFC’s record earnings = big confidence boost in Africa’s ability to fund its own growth 🚀. Angola kicked off its 2025 oil bid round 🛢️ in the Kwanza Basin, global companies are already circling 👀. Morocco’s OCP Group is going green 🌱, planning to raise $500M in green bonds for farming across West Africa.

• South Africa vs the US: Things are heating up. A 10% US tariff on car exports is bad news for SA’s economy. Experts warn the AGOA trade deal could be at risk too. Sudan’s civil conflict is still raging. Fighting between the SAF and RSF continues in and around Khartoum. The African Union is urging peace talks… again 😔.

See you all next week!

We hope you enjoyed reading our newsletter! There are plenty of facts for you to drop in your next conversation to sound more intelligent. Make sure to share this artistic marvel with a friend!

Good luck for your studies, we know you smart cookies will smash it.

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Best regards,

The EMN Team 💚