Emerging Markets Newsletter

Semester 1 Week 9

Hey Legend!

Happy Monday and welcome to Week 9! 🥳

We can’t believe it either 😧, Week 9’s hit faster than a Canvas deadline you swore didn’t exist 💀. This semester’s flown by in the blink of a sleep-deprived eye 😴 .

We hope you're managing uni, applications, and your social life with more finesse ✨than the Coalition managed last Saturday 📉. If nothing else, it proves cramming and vibes aren’t a winning strategy 🙅.

Hang in there, soldier 🪖. The end is in sight 👀, just a few more all-nighters 🎖️and existential crises to go 🧯.

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The Numbers

Equity markets remained buoyant this week, with all major indices posting solid gains, led by emerging markets and the ASX. However, crude oil dived sharply despite weak year-to-date performance, while gold slipped after a strong run thus far.

The Roundup

India faces market highs and heartbreak, China battles economic strain, and Africa steps into May balancing global turbulence with fragile signs of recovery.

India

The Indian rupee soared, then tumbled as the central bank intervened 💵📉, while Oyo’s IPO plans hit a roadblock thanks to SoftBank 🏨⏳. India also banned imports from Pakistan amid rising tensions 🚫🌍. Tragedy struck in Goa with a stampede at the Shri Lairai Zatra festival. 💔🙏.

• The Indian rupee soared past 84 per U.S. dollar to touch a near six-month peak before reversing course on the back of likely dollar buying intervention by the central bank 💵 📈 ⚖️. Strong portfolio inflows and culling of bearish positions had hoisted the rupee to a peak of 83.78, its highest since October 2024 🔝, but dollar bids from state-run banks and importers ate into the gains ⬇️ 💸 🌪️.

• Indian budget hotel chain Oyo is delaying its third IPO attempt amid opposition from largest shareholder SoftBank and market volatility, aiming to now list by March 2026 at a valuation of $7 billion 📉⏳. SoftBank does not favor Oyo's plan to list in October and has pressed the company to hold off on a public offering until its earnings are stronger 🛑💵.

• India has banned the import of goods originating from or transiting via Pakistan as diplomatic tensions between the two nuclear-armed nations flared ⚠️🌐 in the wake of a deadly attack on tourists in disputed Kashmir region 🔻.

• At least six people were killed and 55 were injured in a stampede at an Indian temple in the western coastal state of Goa where hundreds of devout Hindus had assembled 🙏💔. The stampede occurred on Friday night during the annual Shri Lairai Zatra festival in Shirgao village, which is popular for its events including fire-walking 🕯️.

China

China enters its 'golden week’ following a tumultuous period which saw domestic manufacturing slump 📉, banking profits and margins fall and uncertainty over trade increase 📈. However, strengthened ties between Beijing and Hanoi 🤝 provides a political and economic bright spot amidst the gloom.

• Chinese manufacturing slumped to a 16-month low in April, following an export exodus in March. Chinas Purchasing Manager Index (PMI) contracted to 49 📉🏭, driven by declines in new orders, new exports, and finished goods 📦 sub indexes; underperforming Bloombergs prediction 🔮 of 49.6. Factory hiring👨‍🏭 also took a hit with the employment index declining by 0.3.

• China’s top 5 lenders feel the squeeze from lower margins with CCB, ICBC and BoC posting profit drops of 4%, 4% and 2.9% respectively in the first quarter🏦📉. In contrast, BoCom and AgBank saw profits increase by 1.5% and 2.2% despite thinning margins🏦📈. The worse may yet still come😧 with potential rates cuts✂️ threatening to limit banks interest rate margins, further undermining probability.

• Worrying signs for Chinese trade! The Ministry of Transport delayed the release of trade data - typically released every Monday - without public explanation 😶‍🌫️, with analysts speculating 🤔 increased tariff pressures as the cause. The next trade report scheduled for May 9th, will give a comprehensive📝📊 look at Chinese trade post-Trump tariffs for the month of April.

• Beijing deepens symbolic ties to Hanoi as PLA honour guard forces 🪖 made their first-ever appearance in Vietnam’s ‘National Reunification Day’ parade 🎉🎊, celebrating the 50th anniversary of the fall of Saigon. This marks the largest overseas diplomatic deployment 🌏 of PLA forces, with a record breaking 104 Chinese military personnel present.

Africa

Africa has kicked off May facing global turbulence 🌪️. Slower trade 📦, tight budgets 💰, and political uncertainty 🏛️ weigh on growth. Inflation is easing ❄️ and spending’s picking up 🛍️, but risks remain as the US-China clash reshapes demand across the globe🌏

• The US is nudging DRC and Rwanda toward a peace deal 🤝 with mineral pacts worth billions 💎💼 on the table. If signed, it could cool one of Africa’s hottest flashpoints 🔥 and supercharge investment and infrastructure 🚧📈 across Central Africa.

• The IMF trimmed Africa’s 2025 growth to 3.8%📉. Inflation’s cooling at 4.5% 🌡️, but real incomes remain stuck and youth jobs are lagging 🧑🏾‍💼. South Africa slashed its VAT hike ❌ and will table a new budget 🎯 on May 21.

• Markets are shaky ⚖️, Ghana’s bond trade dipped 📉, and Nigerian exporters are rethinking strategies due to US tariffs 📦🔁. Budget cuts threaten social spending 🏥📚, and the IMF is urging smarter tax collection 🧾 to plug aid gaps.

• Coalition drama continues in South Africa 🗳️ as tax feuds deepen 💢. Globally, the US is flexing its influence 🦅 to secure minerals and calm tensions 🌐. Trade wars and tariff talk keep nerves high across Africa’s big economies ⚠️.

See you all next week!

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Best regards,

The EMN Team 💚