Data Gloom Hits Emerging Markets With Enough of Their Own Issues

Trucking News
2 Oct by Vitaliy Dadalyan

Data Gloom Hits Emerging Markets With Enough of Their Own Issues

(Bloomberg) -- It's not shaping up to be a very comfortable start to October. Although we're only two days into the month, emerging-market assets of most shades were on the back foot again, and for once it was difficult to blame the trade war. This time, analysts pointed to poor manufacturing readings and weaker data across the developing world in general as reasons for the listlessness. There were plenty of idiosyncratic stories to dull the palate too, notably in South Korea, Turkey, Poland, Peru and Brazil.Biggest LoserSouth Korea's won was the biggest loser in the foreign-exchange market after Pyongyang tested at least two ballistic missiles, hot on the heels of a promise to resume stalled talks with the U.S. over its nuclear program.Turkey ReturnsTurkey's lira, the best-performing emerging currency behind the ruble and Mexican peso in the past month, went into retreat as President Recep Tayyip Erdogan expressed his readiness to act alone in northeast Syria and retake areas from American-backed Kurdish forces. Turkish stocks remained little changed, underlining the continued allure of the real returns achievable from the country's equities. Tugce Ozsoy reports on that today from Istanbul.Ruble's Reckoning?The ruble was having its seventh off-day in a row, defying recent analysis suggesting it would not only be among the biggest winners in the event of a trade deal but could also prove a haven if the global economy slides into a recession. Commerzbank AG sees the Russian currency weakening to 66 per dollar before long. A report today was forecast to show the economy expanded less than 1% for a second consecutive quarter in April-June. And the technicals aren't offering much comfort either. Still the biggest winner this year in the emerging-market currency stakes, is this the ruble's moment of reckoning?China ScenariosEven when the country is on a five-day break, you can never ignore China. Analysis today from Bloomberg's emerging-market strategist, Simon Flint, sets out the significance of what may turn out to be a below-6% growth rate in the world's second-biggest economy. Meantime, Sydney Maki explores how traders play the China story through the rest of the EM universe when the country has its feet up.Peruvian IndifferenceThough the chaos sweeping Peru's political landscape represented another risk to the EM story, the price action suggested a remarkable sense of indifference among the trading community, largely predicated on the country's healthy fiscal accounts. Peruvian dollar bonds maturing in 2050 yielded 3.30% at the close yesterday, the second-lowest yield on a 30-year bond in Latin America after Chile. It's a point well captured in a piece from Latin America reporters Justin Villamil and Aline Oyamada.Brazilian HoseThe action in Brazil may be interesting today. President Jair Bolsonaro's proposal to overhaul Brazil's pension system just passed the first of two votes on the Senate floor but it then got watered down as lawmakers approved an amendment to the bill. They've clearly got a very efficient hose in that Brazilian assembly. Joking aside, it's unlikely to upset the hardened narrative that the reforms will finally see the light of day later this month. Note that the main Brazilian ETF trading in Japan was looking stronger earlier today.Loan Ruling LoomsNow Poland. While there's a central bank policy decision today -- and it's forecast to be a no-change -- there's a potentially much more significant event looming tomorrow. Namely, the verdict from the European Union's top court over Polish foreign-currency loans. The ways in which this cookie could crumble are complex and difficult to predict, as discussed in our Speaking of EM podcast today. But this biggest risk perhaps is that in the wake of the ruling, courts will force banks to convert the Swiss franc mortgages into zloty at the exchange rate from the day the loan agreements were signed. Needless to say, that could be very bad for the zloty.A Bit of CheerFinally, a bit of comfort for the longer-term. As Lilian Karunungan reports today, the stock of payments due on emerging-market corporate debt is set to tumble by almost a third next year. Companies have $303 billion of dollar-denominated bond repayments in 2020, down about 32% from this year and the least in four years, according to data compiled by Bloomberg. The decline is most evident in Latin America and Asia. Given the much-anticipated dollar retreat looks as far off as ever, it's a welcome salve for the EM universe.To contact the reporter on this story: Justin Carrigan in London at [email protected] contact the editors responsible for this story: Justin Carrigan at [email protected], Marton EderFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


Trucking News
2 Oct by Vitaliy Dadalyan

UPDATE 1-Mainland banks, pro-Beijing businesses caught in Hong Kong protest cross-hairs

Hong Kong anti-government protesters are increasingly focusing their anger on mainland Chinese businesses and those with pro-Beijing links, daubing graffiti on store fronts and vandalising outlets in the heart of the financial centre. Protesters took aim at some of China's largest banks at the weekend, spray-painting anti-China slogans on shuttered branches and trashing ATM machines of outlets such as Bank of China's Hong unit, while nearby international counterparts such as Standard Chartered escaped untouched.


Trucking News
2 Oct by Vitaliy Dadalyan

GLOBAL MARKETS-Shares fall to 1-month low after U.S. manufacturing hit

A major global share index hit its lowest level in a month on Wednesday after U.S. manufacturing activity tumbled to more than a decade low, sparking worries that the fallout from the U.S.-China trade war is spreading to the U.S. economy. A slowdown in U.S. economic growth would remove one of the few remaining bright spots in the global economy and come just as Europe is seen as close to falling into recession. The FTSE 100 index slipped 1.5%, the largest drop across European regions and ahead of UK Prime Minister Boris Johnson's talks with Brussels as he prepares to announce his final Brexit offer.


Trucking News
2 Oct by Vitaliy Dadalyan

UPDATE 1-European shares hit one month-low as growth worries intensify

The FTSE 100 index slipped 1.2%, the largest drop across European regions and ahead of UK Prime Minister Boris Johnson's talks with Brussels as he prepares to unveil his final Brexit offer later in the day. Investors were also still reeling from the shock of dismal U.S. and euro zone factory data on Tuesday, which saw the pan-European STOXX 600 index and the euro zone index log their biggest one-day drop in two months. A drawn out U.S.-China trade war, along with slowing economic growth and Britain's dramatic exit from the European Union, have rattled European equity markets this year.


Trucking News
2 Oct by Vitaliy Dadalyan

Blackstone Warned Denmark Will Act on High Apartment Rents

(Bloomberg) -- Denmark's new left-wing government pledged tough laws to control housing costs and singled out Blackstone Group Inc. for “unsustainable” rental practices.Kaare Dybvad, the Danish housing minister, said Blackstone is “challenging” local legislation “where there are holes.” By taking advantage of those holes, the concern is that properties are being bought up and then rented out at prices that Danes are finding increasingly difficult to afford.Speaking in an interview in Copenhagen on Tuesday, Dybvad said that “it's clear we need to do something about this.”“We're not going to legislate around an individual firm, but the way this has been going so far isn't sustainable,” he said. “If Blackstone chooses to conduct itself in a different way in Denmark, in a more sustainable way here than in many other places in the world, then it's clear that they're allowed to be here on the same terms as others.”Dybvad said the Social Democrat government that has ruled Denmark since June will now start formulating stricter laws to address the concerns. He has previously criticized Blackstone for “driving up prices in the Copenhagen rental market” and making it harder for low-income earners to remain in the city.The housing minister laid out his plans as Denmark's parliament met for its first session since the summer break. As the chamber reconvened, Prime Minister Mette Frederiksen took the opportunity to lash out at what she described as corporate greed. The 41-year-old became Denmark's youngest ever head of government this year after promising a more equal society with increased spending on welfare.Frederiksen also used her speech to lawmakers to zero in on the housing market. “An American private-equity fund is purchasing our houses,” she said. And she touched on the list of financial scandals that have angered Danish voters in recent years. “Does greed know no boundaries? Apparently not,” she said.Blackstone has said it's a long-term investor in the Danish market, and that it complies with all regulations. Jean Ahlefeldt-Laurvig, a spokeswoman for Blackstone-owned 360 North Property Management, said in August that “the under-supply of rental housing in Copenhagen needs to be addressed, which is why we are bringing additional units to market, while continuing to invest capital into the properties, improving sustainability and contributing to the local economy.”“We intend to own these properties for decades and will ensure that they are operated to the highest standard,” Ahlefeldt-Laurvig said back then. “We have always operated within the existing regulatory framework, which is one in which all leases are and will remain indefinite for the existing tenants.”--With assistance from Frances Schwartzkopff and Nick Rigillo.To contact the reporter on this story: Morten Buttler in Copenhagen at [email protected] contact the editors responsible for this story: Tasneem Hanfi Brögger at [email protected];Paul Sillitoe at [email protected] more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


Trucking News
2 Oct by Vitaliy Dadalyan

Metro Bank Founder Hill to Leave Board Early as Stock Slides

(Bloomberg) -- Metro Bank Plc is saying goodbye to its outspoken American founder, Vernon Hill, sooner than expected after a year that saw the ten-year-old British bank's shares collapse.Hill, the U.S. entrepreneur who founded Metro a decade ago, will step down as chairman on Dec. 31, the London-based bank said in a statement Wednesday. He had previously announced his intention to depart, but only after a replacement was found.The move “could be a sign the lender is reaching the end of its independent existence,” Georgi Gunchev, an analyst at Bloomberg Intelligence, said in a note.Metro Bank's crisis deepened last week when investors balked at its attempt to sell bonds, despite a record coupon. Unless regulators waive the requirement, it has less than three months to raise money to boost its financial resilience. The lender has struggled to reassure investors since January, when it said regulators had discovered issues with the way it classified loans.The search for a new chair is “progressing well,” but if Hill's replacement isn't found by the end of the year, an independent non-executive director will take the role on an interim basis, the bank said.“The board probably pushed for this to be accelerated,” said John Cronin, an analyst at Goodbody. “It's positive from a regulatory perspective. The bank needs another restructuring to get back on track.”The shares were little changed at 9:37 a.m. in London. They're down 89% this year and touched a record low last week.Hill, 74, founded the lender in the wake of the financial crisis at a time when British regulators were encouraging startups to challenge the big four legacy lenders.While those big banks had been closing branches for years, eliminating front-line jobs and urging customers to do most of their business online, Metro Bank dotted England with new outlets on main shopping streets, aiming to scoop up deposits as quickly as possible. It now has 70 branches.The bank needs to raise 500 million pounds ($613 million) by January in order to comply with a rule known as the minimum requirement for own funds and eligible liabilities, or MREL. Metro Bank said earlier this week that it was confident of meeting the MREL target and had other options to raise this money after the failure of the bond sale, whose pricing was described as “distressed” by one analyst.Fitch Ratings downgraded Metro Bank to BB on Sept. 30, saying its ability to grow has been impaired and management's credibility was low.The failed MREL sale makes “a sale of the business an increasingly likely outcome,” Gunchev said.Metro's original problems stemmed from the risk weightings placed on different kinds of loans -- governing how much capital needed to be held against them. The bank put a 50% risk weighting on its commercial mortgages, and 35% for buy-to-let mortgages; both were much too low. Regulators are still probing how this happened. In May, rumors on social media led to lines of concerned customers at one London branch.“The board shares Vernon's view that Metro Bank has now reached a point where an independent chairperson is appropriate,” Michael Snyder, the senior independent director at Metro Bank, said in the statement. “Vernon is the inspiration behind Metro Bank.”Hill's departure from the front line of London finance was announced on the same day as that of Martin Gilbert, who built Aberdeen Asset Management into one of Britain's biggest fund managers. Gilbert, 64, vice-chairman of what is now Standard Life Aberdeen Plc, will depart next year.To contact the reporters on this story: Viren Vaghela in London at [email protected];Stefania Spezzati in London at [email protected] contact the editors responsible for this story: Ambereen Choudhury at [email protected], Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.