Entries for 2021

China's stock market has typically been thought of as volatile, driven by capricious retail investors. The market has improved markedly in the past few years, thanks to greater participation of domestic and global institutional investors. This note examines the growth of China's A-share market. 

Cross-border climate finance flows to emerging markets were around $80 billion in 2020—less than 8% of total EM inflows; Despite a strong pickup in recent months, private capital inflows geared to sustainable investing in emerging markets and developing countries remain limited—well below levels needed to bridge SDG investment gaps; With many emerging markets increasingly reliant on portfolio debt financing, “greening” EM bond markets should help drive international capital towards sustainable EM investments.

Frontier LatAm countries have bounced back following a sharp decline in 2020, but disparities in the recovery remain. Guatemala has already surpassed pre-COVID-19 GDP levels, while Panama continues to face challenges. Fiscal accounts have been severely affected, worsening public financing woes. 

Increased uncertainty triggered outflows from Turkish assets in late March. Non-residents hold much smaller positions compared to the 2013 episode. Sharply higher cost of borrowing will weigh on near-term growth prospects. Short-term external rollover needs are sizable but look manageable for 2021.

Using well-established metrics, we review a number of ESG rankings to encompass social factors—health, education etc.; Unsurprisingly, mature markets tend to score better on social performance. Emerging markets have scope to boost social performance, notably on issues related to gender equality.

Depreciation pressure on the Rand has been weaker and yields risen less than in 2013. However, South Africa’s fiscal position is much weaker than during the taper tantrum. Substantial financing needs leave the country vulnerable to shifts in market sentiment. Furthermore, structural issues will continue to constrain growth in the coming years. This will add to already-heightened foreign investor concerns over debt sustainability.

The April U.S. Regulatory Update covers Fed announcements on the leverage ratio and dividends, agencies’ actions on climate risk, confirmation hearings on Capitol Hill, and more.