Emerging Markets Newsletter

Semester 1 Week 4

Hey Legend!

Happy Monday and welcome to Week 4! 🥳

Hope the semester is treating you well and the caffeine consumption isn’t getting too out of hand (yet) ☕. Three weeks down, plenty more to go, lock in 🔒

Thank you to everyone who attended our seminar on investing in Emerging Markets🙏. The key take away is to punt your life savings into $EEM (not financial advice) 📈.

But in all seriousness, we hope you found the session insightful 💡 and left with a stronger understanding of the risks and opportunities in emerging markets 👨‍🎓.

President’s Selection

The Numbers

Markets showed signs of stabilisation over the past week, with the S&P 500 and ASX All Ordinaries recovering some ground, while emerging markets remained flat. Gold and crude oil continued their upward momentum, whereas Bitcoin slipped, maintaining its year-to-date decline.

The Roundup

India eyes hosting rights for a major event while trade war threat with US looms large. In China, advancements in EV technology are overshadowed by deteriorating relations with Canada. Africa continues to make progress towards economic stability, however ongoing conflicts threaten these efforts. Let’s jump right in.

India

India eyes hosting the 2030 Commonwealth Games even as trade tensions with the US escalate. A U.S. private equity firm plans to invest in a local company meanwhile, India's forex reserves have reached a three-month high, enhancing economic resilience.

• India has submitted an "expression of interest" to stage the 2030 Commonwealth Games 🏏, potentially the perfect dress rehearsal for the country's bigger dream of hosting the Olympic Games six years later⚽️⚾️ . India hosted the 2010 Commonwealth Games in New Delhi, where the buildup was marred by allegations of corruption and mismanagement 👀 .

• India's foreign exchange reserves rose by $300 million to a more than three-month high of $654.27 billion as of March 14 📈 💵. The rupee has been volatile due to uncertainties surrounding global trade from constant changes in US tariff plans ⬆️ ⬇️ . The RBI has curtailed volatility through dollar sales in the spot market and dollar-rupee buy-sell swaps to help boost rupee liquidity 💨 .

• Shares of India's Manappuram Finance jumped 6% on Friday after analysts said that Bain Capital's plans to buy an 18% stake and jointly control the gold loan provider 💰. U.S. private equity firm Bain Capital will subscribe to Manappuram's shares at 236 rupees apiece, at a 9% premium over the stock's closing price on Thursday of 217.5 rupees 📊 📝 .

• India and New Zealand have restarted free trade talks as PM Christopher Luxon holds talks with PM Narendra Modi 🕴️ . Bilateral trade between the two countries is valued at under $2bn currently 💰 . These trade talks have assumed renewed significance on the back of US President Donald Trump's decision to impose tit-for-tat tariffs on imported goods from countries, including India ⚔️ .

China

This week, we explore China’s drive to facilitate sustainable economic development, fractured relations with Canada over judicial executions, Beijing’s attempts to protect the Yuan and BYD’s game-changing advancement in battery technology. 

• Chinese electric vehicle giant BYD unveils major breakthrough in EV charging technology. The new advancement would see the company’s latest charger 🔋🔌 be able to operate at 1 megawatt ⚡️ and provide a driving range of 400km in 5 minutes ⏱️🚗💨, according to CEO Wang Chuanfu; effectively doubling the existing charging capacity of its American rival Tesla.

• Canada accuses China of executing 4 Canadian citizens on drug charges earlier in the year, despite months of political lobbying 🗣️ from Ottowa for clemency 🙏. Beijing defended its actions as acting “in accordance with the law”👨‍⚖️ 🏛️ following strong condemnations from Canadian Foreign Minister Mélanie Joly.

• The People’s Bank of China (PBOC) keeps benchmark lending rates unchanged as Beijing aims to stabilise ⚖️ the Yuan amidst downward market pressure 💢. However, future rate cuts are expected “at appropriate time”, with Goldman Sachs forecasting 🔮 the PBOC to enact two 20-basis-point rate cuts and two 50-basis-point cuts ⬇️ in the reserve requirement ratio.

• Sustainability projects are set to receive a major boost! China’s Finance Ministry 🏦 announced that it would issue sovereign green bonds in London, the first time it has done so abroad 🌍. Valued at $829.75m, the Yuan-denominated issue will be used to fund environmental initiatives ♻️ and “support domestic green and low-carbon development” 🌿.

Africa

This week, Africa reflects on some progress and challenges as nations work together toward economic and political stability. Inflation is expected to drop, allowing for potential monetary easing, but ongoing conflicts threaten stability.

• On March 18, Qatar mediated a ceasefire 🤝  between the DRC and Rwanda after months of tension over the M23 rebel group. Despite agreeing to informal talks, skepticism remains, as past ceasefires were used for military regrouping, underscoring the region’s fragile peace.

• This week, Africa’s inflation rate📊 is projected to decline from 16.1% 📉💰in 2024 to 12.6% in 2025, with projections of 9.9% for 2026, according to a United Nations report released this week. This drop is related to tighter monetary policies and falling global energy.

• African stock markets 🏦 are witnessing increased activity with notable IPOs in the banking sector. Algeria’s Banque de Développement Local (BDL) 📊 announced plans this week to offer 30% of its capital on the Algiers Stock Exchange.

• The Sudanese Armed Forces (SAF) advanced against the Rapid Support Forces (RSF) in central Khartoum ⚔️ , moving to reclaim key areas. SAF leader Abdel Fattah al-Burhan plans to establish an SAF-led government once the city is fully secured. 🏛️

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.

If you have any inquiries please email [email protected]

We look forward to seeing you at our next event!

Best regards,

The EMN Team 💚