Martin Bercetche’s Post

The proposal to cap the returns investors can make buying distressed emerging market bonds has failed to get through the New York state legislature but could the next UK government support similar changes to English law? Polls suggest the Labour Party will secure a hefty majority at the UK’s general election on July 4. One of the final acts of Labour’s last administration in 2010 was to provide debt relief to heavily indebted poor countries, saying private investors should give relief in line with official lenders. Sovereign debt lawyers caution that taking such unilateral action could result in a move away from English law, which is a popular jurisdiction for issuers, or have the unintended affect of making raising debt more expensive for emerging market countries. In March foreign secretary David Cameron said in the House of Lords: “The IMF advice and the Treasury advice is that if we legislate in this way, particularly unilaterally, it would affect the cost and availability of finance to other countries, and it may mean that more of these financial deals are written elsewhere in a less advantageous way than is currently the case.” Labour will publish its manifesto on Thursday. Full article here: https://lnkd.in/ewbzbQub

Despite initial concerns about the ability of countries with low credit ratings to access bond markets, the first quarter of the year witnessed a record issuance of hard-currency bonds by emerging-market sovereigns. Notably, countries such as Côte d’Ivoire, Bahrain, Benin, and Kenya have successfully tapped into these markets, indicating a renewed avenue for liquidity. However, the high coupon rates accompanying these bonds raise apprehensions among private-sector bondholders, who fear a potential surge in sovereign debt restructurings. While absolute yields exceeding 10% may seem alarming, historical data and ongoing negotiations, such as Zambia's debt restructuring deal, provide some optimism regarding the resolution of sovereign defaults. Despite the complexity and idiosyncrasies inherent in such negotiations, the reopening of markets and additional support from institutions like the IMF signal a promising trajectory for lower-rated sovereign borrowers in emerging markets. This resurgence not only underscores the resilience of these markets but also invites further examination of the intricacies of sovereign-debt contracts and restructuring mechanisms. Source - https://lnkd.in/e_92SZNs #Finance #SovereignBonds #EmergingMarkets #DebtRestructuring

“You need consistent policies to attract foreign capital, JP Morgan tells Nigeria” - Guardian.ng In the words of JP Morgan’s CEO, Mr Jamie Dimon, he believes that JP Morgan is willing to triple their investment in Nigeria, and even other private capital companies, but for this to happen, there must have been policies and regulations in place to ensure absolute security of the investor’s money. Just like we’ve always preached, it’s important that countries of the world, especially African countries place huge emphasis on making policies that totally have lasting positive effects on the economy. Undoubtedly, policies are backbones of a nation. These are what govern and guide the economy and commonwealth of the nation. Making policies that contributes to the development of the country will increase the trust that foreign investors have in our country, and at the same time attract more investors. With enabling policies and regulations in place, investors will be rest assured that their money is safe whereever they opt to invest in and that the country is responsible, transparent and accountable. Meanwhile, as much as policies are developed, the government and regulatory bodies must ensure strict compliance with these policies and sanctions must be in place to penalize any party that is found wanting for noncompliance. Nigeria as a nation needs to make laws and regulations that give room for foreign investment and that make investing in Nigeria become easy. God Bless Nigeria 🇳🇬. Link to the full news: https://lnkd.in/eUDvqeDZ #Nigeria #policies #NESG #Economicsummit #regulations

The International Monetary Fund has assessed that has been “sufficiently strong progress on the debt restructuring” for a review of Sri Lanka’s program by its board on June 12, an official said. “…[T]he authorities have been holding extensive discussions with external official creditors regarding an MOU with the official creditor committee and the final agreements with the Export Import Bank of China,” IMF Communication Director Julie Kozack told reporters in Washington. “Discussions with external bondholders continue with the aim of reaching agreements in principle soon. Negotiations with the China Development bank are also at an advanced stage. “There is a strong expectation that agreements with external commercial creditors consistent with program parameters will be reached soon. “So overall we assess that there has been sufficiently strong progress on the debt restructuring front.” #BusinessNews #SriLankanEconomy #thesrilankan

China's Trust Assets Value Grows to Record USD3.7 Trillion at End of Second Quarter

China has rejected IMF proposal (International Monetary Fund) to use nearly $1 trillion of direct China government financing to complete unfinished housing projects in China, due to moral hazards & bail-out expectations.  Read - https://lnkd.in/gmGnu5yr follow Caproasia | Driving the future of Asia China has rejected IMF proposal (International Monetary Fund) to use nearly $1 trillion of direct China government financing to complete unfinished housing projects in China, due to moral hazards & bail-out expectations.  

China has rejected IMF proposal (International Monetary Fund) to use nearly $1 trillion of direct China government financing to complete unfinished housing projects in China, due to moral hazards & bail-out expectations.  Read - https://lnkd.in/g2qD93Vr follow Caproasia | Driving the future of Asia China has rejected IMF proposal (International Monetary Fund) to use nearly $1 trillion of direct China government financing to complete unfinished housing projects in China, due to moral hazards & bail-out expectations.  

REDD CEEMEA continues to produce market-moving insights on Ghana, one of the most high-profile live sovereign restructurings in the region. In his recent piece, Giovanni Riva has focused on the recoveries implied by the agreement in principle reached between the government and the two groups of bondholders earlier this week, as well as the next steps. The preliminary deal is expected to return to investors between 53 and 55 cents based on a 12% exit yield. The IMF staff provided positive feedback on the deal while Ghana's official creditors' committee (OCC) has yet to do so. The OCC is likely to provide some initial feedback on the deal this week at an OCC meeting scheduled to take place in Paris. Reach out for a free trial to make sure you don’t miss the next update on Ghana and other EM credits! https://hubs.la/Q02Dyjm00 #MarketInsights #SovereignRestructuring #GhanaEconomy #InvestorUpdates #DebtRecovery

From Investment IQ. Emerging market sovereigns that have restructured their debt present a new set of opportunities for fixed income investors. Countries like Zambia, Ghana, and Sri Lanka have posted strong returns following recent restructurings, with innovative bond features tied to economic performance. Vanguard 🔗 Read the full article on Investment IQ: https://incm.pub/4fMgPsY #investing #assetmanagement #wealthmanagement #finance

Imagine you’re standing in a busy market, where every stall is shouting its wares and prices are constantly changing. It’s chaotic, but exciting—each deal struck could transform someone’s fortunes. Now, picture this market on a much larger scale: instead of fruit and spices, it’s trillions of dollars in investments, and instead of shouting merchants, you have nations, banks, and corporations making moves. Welcome to the GCC debt capital markets. GCC debt capital markets are expected to hit a massive $1 trillion milestone by 2025, according to Fitch Ratings. Think of it as the region reaching a new level of financial maturity. Sovereign issuances—where governments raise funds by issuing bonds—are on the rise, especially as oil prices are projected to dip to $70 per barrel in 2025 and $65 in 2026. These markets are also being powered by ambitious government projects, fiscal deficits, and a growing appetite for diversification in funding sources. 40% of this debt is tied to sukuk—Islamic bonds. The GCC is already the largest issuer of sukuk globally, and Fitch notes that 81% of GCC US dollar sukuk are investment-grade, with no defaults. That’s a remarkable track record, especially in an era of global economic uncertainties. But it’s not all smooth sailing. Challenges like the complexities of Sharia compliance and potential geopolitical instability in the region could impact this growth. On the other side, regulatory reforms and GCC fund passporting could unlock fresh opportunities, making it easier for investors to access and benefit from these markets. So why does this matter? Because these developments are shaping not just the GCC’s financial landscape but its entire economic future. As the region moves toward diversification and sustainability goals, these markets are becoming the backbone of transformation. #GCCFinance #DebtCapitalMarkets #SukukInnovation #IslamicFinance #EmergingMarkets #EconomicDiversification #SustainableInvestments