Category
- Agriculture
- Automobiles and Machinery
- Bank, non banking financing, investment
- Blasting
- Construction
- Consumables
- Education
- Energy
- Engineer , Architecture and Geodesy
- Finance, Audit,Accounting and Brokerage
- Food
- Foreign Trade
- Geology Exploration
- Health
- Information Technology
- Insurance
- Labor Safety
- Legal and Business consulting
- Lighting
- Mining equipment
- Mining Services
- Other product and service
- Road
- Sewing and textile products
- Transportations
- Travel
Events
Investors brace for emerging markets debt defaults with Laos and Mongolia in the firing line www.independent.ie
Concerns about potential sovereign defaults among Asia’s frontier markets are growing with the Economist Intelligence Unit joining Malayan Banking in warning of risks amid faster inflation and rising borrowing costs.
Laos has the highest chance of non-payment in the next four years, followed by Mongolia, the EIU said in a report, adding that Myanmar is also a potential risk.
Global bond investors are becoming more wary of the threat of a historic cascade of defaults after Sri Lanka and Russia halted debt payments this year.
The concerns are more acute in frontier economies struggling with surging imports that are cutting into their reserves, compounded by aggressive interest-rate hikes from the Federal Reserve which are driving up borrowing costs globally.
It’s a risk that’s been echoed about vulnerable developing economies around the globe this year, with Bloomberg Intelligence pointing to particular uncertainty in El Salvador, Ghana, Egypt, Tunisia and Pakistan.
There are now 21 emerging markets with sovereign debt that trades at distressed levels – yields more than 10 percentage points above that of similar-maturity Treasuries – which can indicate investors believe a default is a real possibility.
That’s more than double the number at the end of 2021, according to data compiled from a Bloomberg index.
“Our analysis indicates conclusively that Laos and Mongolia are most at risk of following Sri Lanka into default in 2022-2026, with the former of more immediate concern,” EIU said. Despite forecasts for relative stability in Myanmar, “an escalation of the domestic conflict could come with little warning, jeopardising the sovereign’s repayment capacity”.
The outlook for Myanmar’s economic growth remains weak as surging inflation, dollar shortages and lingering domestic conflict pose challenges to its pandemic recovery, according to a World Bank report this week.
Published Date:2022-07-25
