Semester 2 Week 10

Hey Legend!

Welcome to week 10 champ! Time flies fast, where did this semester go 😮 ?

Hope you had a good break 😊 and took some time to recharge/catch up on lectures 😅. With three more weeks until swotvac, there is no time better than now to lock in 🔒. We believe in you soldier 🙏.

On a lighter note, we are excited to announce our flagship event ⭐ — An Introduction to Emerging Markets presented by Dr Gaby Berhe Nadari from the Faculty of Business and Economics.

• 📅 Friday 11th October

• ⏱️ 2.00 - 4.00 pm

•  📍 Parkville, The Spot, Level 4, Lectorial Learning Space 4012

This seminar will be a fantastic way to learn about the current state and future outlook of emerging markets 🌏, as well as the abundant career 💼 and investment opportunities 💸 on offer. We look forward to seeing you there 💚

The Numbers

The Roundup

This week we dive into booming Indian foreign trade with exciting bilateral agreements strengthening key sectors 💪. China this week has seen huge growth in equity markets 😁 but tainted by growing civil unrest 🥶. Finally, we end off on a positive note by exploring the recent strong US economic data and its effects across the globe 🌎

India

🚀 India is accelerating its rise to global superpower status! 💪 With a booming economy 📈, cutting-edge education programs 🎓, and major advances in defense technology 🚀, India is poised to become a global leader. 💻 The country's digital payments market is skyrocketing 💳, solidifying its position as a hub for innovation and growth. 🔥

• Get ready for a brain drain reversal! 🧠 India has announced a new partnership with the UK to launch a revolutionary education program, focusing on cutting-edge technologies like quantum computing 💻 and cybersecurity 🔒. This game-changing collaboration will attract top talent from around the world and create a new generation of innovators and leaders.

• India's economy is on 🔥! With a projected GDP growth rate of 6.5%, 📈 the country is poised to become the world's third-largest economy by 2030. The manufacturing sector is booming, driven by a surge in consumer spending and a rebound in industries like electronics 📱 and pharmaceuticals 💊. India's exports surged by 22% in August, with a significant increase in shipments of engineering goods and textiles.

• Digital payments are the new norm in India! 💳 The country's digital lending market is expected to skyrocket to $350 billion by 2027, fueled by the rise of fintech 🏦 and digital payment platforms. The Reserve Bank of India is regulating the space to ensure a secure and inclusive financial ecosystem. India's largest bank, State Bank of India, announced plans to raise ₹10,000 crore through a share sale.

• India's defense capabilities just got a major boost! 🚀The country successfully tested a new hypersonic missile, solidifying its position as a global leader in defense technology. A new satellite 🛰️ has also been launched for Earth observation and disaster management, further strengthening India's space program. India has also signed a deal with Russia to manufacture AK-203 assault rifles in the country.

_China

China has made many announcements to address significant economic concerns, from increasing the retirement age 👴👵⬆️to announcing handouts for the needy 🤲🧎and significant interest rate cuts🏦✂️. Furthermore, rising tensions between US & China will likely create a major shift in the landscape of international trade🔀🌎.

• China has announced that it will raise the retirement age for most workers 👵🔺, a move which has drawn great criticism across the nation 👎. Beginning in January 2025 and phased in over 15 years🗓️⏳, the retirement ages for the following types of workers will change: female blue-collar workers (increasing from 50 to 55), female white-collar workers (55 to 58) and men (60 to 63). This is the first change in retirement age since the 1950s, which has spurred great anger amongst the Chinese population 😡.

• Major shifts to the flow of international trade 🔁🚢 are occurring as a result of rising political tensions between USA and China🥶, whereby USA is seeking to reduce its exposure to Chinese trade📉. This is evident through recent US tariffs 🏷️on various Chinese products, notably Chinese electric vehicles. This will likely result in both countries expanding trade with other emerging Asian and Latin American markets 🌎🌏as they seek alternative producers and customers of traded goods.

• China will distribute a one-time cash transfer to the extremely poor, orphans and those in difficulty🏚️💰🤲. The CCP has stated that this initiative is intended to demonstrate “concern and care” for those in need, however, this policy announcement is likely also another response measure to combat economic struggles that loom over the nation📉😰.

• The People’s Bank of China (PBOC) 🏦 has announced broad interest cuts between 20 to 50 basis points across all lending rates from short-term loans to mortgages💰✂️. This comes as China becomes increasingly desperate to revive its property market, which has seen property prices fall at the sharpest rate in almost a decade🏘️🏙️📉.

Hot Topic 🔥

On September 26th, emerging markets had their best day in nearly a year thanks to new stimulus proposals by the Chinese Government and strong US economic data. 

MSCI Inc.’s EM stock index closed 2.3% higher — the most since November — to cap off a six-day winning streak. Tech companies including Tencent Holdings, Alibaba and PDD Holdings contributed the bulk of the index gains. The developing currency counterpart gained 0.1%.

The rally was ignited by a pledge from China of increased fiscal spending, stabilisation of the property sector and forceful rate cuts — all of which are efforts to slow down growth. 

The data from the US has revealed that the bounce-back from COVID-19 is in better shape than previously estimated. Additionally, a decline in unemployment claims highlights the labour market's resilience. 

Ultimately, China’s stimulus measures and the stronger US economy bode well for riskier assets. These conditions in China and the US also are a slight drag on the USD, mostly against growth-sensitive currencies. 

So far, the Chilean peso has gained, boosted by a rally in copper prices. The South Korean Won and the Colombian Peso followed, while the Indonesian Rupiah and Malaysian Ringgit dropped.

As such, the optimistic US economic data and the news of stimulus in China are improving investors' risk appetite when it comes to emerging markets. 

Enjoy the rest of the week, we’ll see you same place, same time, next Monday!

Best regards,

EMN 💚