financetom
Business
financetom
/
Business
/
Small emerging market dollar bonds resume selloff, Pakistan drops more than 6 cents
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Small emerging market dollar bonds resume selloff, Pakistan drops more than 6 cents
Apr 9, 2025 1:53 AM

JOHANNESBURG/NAIROBI (Reuters) - International bonds issued by smaller, riskier, emerging economies suffered another sharp selloff on Wednesday after President Donald Trump's eye-watering 104% tariffs on China took effect, re-igniting turmoil across global markets.

Pakistan's longer-dated dollar-denominated bonds tumbled more than 6 cents to be bid below the 70-cent threshold where debt is seen as distressed, Tradeweb data showed.

Longer-dated bonds, issued by Sri Lanka, Nigeria and Egypt, were all down between 3.5-4.5 cents, although trading was thin, according to market participants.

Debt in smaller emerging markets, known as frontier markets, has suffered sharp selloffs since Trump announced a raft of sweeping tariffs last Wednesday, with many bonds in the asset class losing 10 cents or more over the past week.

The latest rout is boosting the cost of borrowing for those economies sharply, with many of the bonds seeing their yields in the double digits, a threshold that makes it unpalatable for them to tap international capital markets.

"There are some concerns in the market that Frontiers will find it more difficult in the future to raise external funding due to the external market developments and possibly persistent loss in risk appetite," said Gergely Urmossy, senior frontier markets strategist at Societe Generale.

This could lead to more currency weakness in those economies over the medium term and curtail the space for central banks to lower interest rates to shore up their economies, he added.

Many frontier market governments, especially African sovereigns, had only recently returned to Eurobond markets.

They had lost access for some two years when the fallout from COVID-19 and Russia's full-scale invasion of Ukraine sent inflation sharply higher and fuelled a global interest rate-hiking cycle that priced those governments out, and helped push Ghana and Zambia into default.

Razia Khan, head of research, Africa and the Middle East at Standard Chartered said the latest set of tariffs had fuelled more concerns over global growth.

"Frontier markets, especially at the lower end of the ratings spectrum, are seen as more vulnerable when risk-off sentiment grips markets," she said.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
--Mesa Laboratories Maintains Quarterly Dividend at $0.16 Per Share, Payable Dec. 16 to Shareholders of Record on Nov. 29
--Mesa Laboratories Maintains Quarterly Dividend at $0.16 Per Share, Payable Dec. 16 to Shareholders of Record on Nov. 29
Oct 2, 2024
02:11 PM EDT, 10/02/2024 (MT Newswires) -- Price: 132.53, Change: +2.14, Percent Change: +1.64 ...
Humana Flags Hit to 2026 Revenue, Bonus Payments From Potential Medicare Star Rating Cut
Humana Flags Hit to 2026 Revenue, Bonus Payments From Potential Medicare Star Rating Cut
Oct 2, 2024
02:01 PM EDT, 10/02/2024 (MT Newswires) -- Humana (HUM) said Wednesday that the number of members enrolled in 2025 Medicare Advantage plans with a quality rating of at least four stars is expected to plunge, likely affecting its 2026 revenue and bonus payments. Preliminary Medicare Advantage data from the Centers for Medicare and Medicaid Services showed the company has about...
Plentiful oil supply dampens industry reaction to rising geopolitical tensions
Plentiful oil supply dampens industry reaction to rising geopolitical tensions
Oct 2, 2024
HOUSTON/DENVER (Reuters) - The oil industry and markets have had a muted reaction to rising tensions in the Middle East, a sign of just how well stocked oil supplies are as U.S. output grows and OPEC+ prepares to lift production. The global oil benchmark Brent jumped 5% on Tuesday after Iran, a key producer and member of the Organization of...
Tutor Perini Awarded $113 Million US Navy Contract to Build Missile Test Facility in Guam
Tutor Perini Awarded $113 Million US Navy Contract to Build Missile Test Facility in Guam
Oct 2, 2024
02:06 PM EDT, 10/02/2024 (MT Newswires) -- Tutor Perini ( TPC ) said Wednesday it was awarded a $113.3 million contract by the US Navy's engineering systems command to construct a missile test facility in Guam. The contract was awarded to the company in a joint venture with its subsidiary Black Construction. Tutor Perini ( TPC ) said it would...
Copyright 2023-2026 - www.financetom.com All Rights Reserved