Emerging market debt sale surge defies global turmoil amid signs of de-dollarisation
Cash-rich investors keen for margins - and to diversify their portfolios - hardly paused their buying spree even during U.S. President Donald Trump's "Liberation Day" sweep of tariff announcements or Israel's attacks on Iran.
Record supplies of new bonds could continue, with low oil prices driving exporting countries to keep borrowing to fund spending.
"What is astonishing this year is how markets ... were still active, if not very active, in the toughest moments of the globe," said Alexis Taffin de Tilques, global head of emerging markets sovereigns and head of Central and Eastern Europe, Middle East and Africa debt capital markets with BNP Paribas.
"The volumes of issuance have been incredible."
Stefan Weiler, head of debt capital markets for CEEMEA at JPMorgan, said debt sales in the group of regions surpassed $190 billion in the first half of the year, on course to beat last year's all-time record of $285 billion.
The surge is another sign of investor interest in emerging market assets in a year that has been marked by the sort of turmoil that typically sends investors fleeing for safe-havens.
"Investors are very cash rich ... eagerly looking to deploy their cash in the primary market," said Weiler, predicting that if oil prices fell, issuance from the Middle East and North Africa could rise further.
The Gulf, led by behemoth Saudi Arabia, issued just over 40% of CEEMEA debt, bankers said, as companies and countries took advantage of a dip in interest rates and the expectation that U.S. Treasury yields would remain elevated for some time.
"It has been definitely a record first half of issuances this year" for the Middle East, said Khaled Darwish, head of CEEMEA Debt Capital Markets at HSBC, calculating that Middle East issuers had raised bond and sukuk deals worth $106 billion so far this year, compared with $139 billion for the whole of 2024.
"The impact of all the geopolitical developments that happened this year has been quite minimal on the GCC market," he added.
Geopolitical upheaval has even helped demand for certain issues. Investors who may once have been cautious about defence companies have become keener in response to higher military spending in NATO countries following Russia's invasion of Ukraine. Czech defence and industrial company CSG more than doubled its dual-tranche 2031 bond issue to 1 billion euros and $1 billion in response to strong investor demand.
Fixed-income investment is better shielded from geopolitical turmoil than equity markets, Taffin de Tilques said. Weiler said crossover investors are keen for the bigger margins emerging market debt offers.
Citi's debt finance team said global emerging-market issuance volumes were up 20% year-on-year for the first half of 2025, with corporate issuance growing particularly quickly.
While much of it is refinancing, new issuers have joined the fray such as Saudi mining giant Maaden, with a sukuk worth $1.25 billion, and Angola's Azul Energy, which debuted with a $1.2 billion bond.
Victor Mourad, Citi's co-head of CEEMEA debt financing, said the growing list of debut issuers offered investors diversification.
Darwish and Weiler said there are also more governments and corporates turning to other currencies - chiefly the euro - to diversify away from the dollar.
Saudi Arabia issued in euros this year, as did Sharjah in the United Arab Emirates. Weiler said other currencies were being explored too, from Japanese yen to "Panda bonds" issued on China's domestic market in yuan. Uruguay sold its first sovereign bond in Swiss francs.
"There's definitely a theme among global issuers currently exploring more non-USD financing alternatives as borrowers are seeking to achieve less reliance on USD-denominated funding," Weiler said, adding it was an early sign of de-dollarisation. "I think it's the start of a clear trend."
Mourad said the other notable trend was a move away from 30-year issues; he said there were only two 30-year transactions from the CEEMEA region in the first half of the year. Yield curves have become steeper globally, making longer-term issues more costly to governments and corporates than before.
"The long end supply has been replaced by a surge in volumes for three-year transactions as issuers took a view on short-term rates," Mourad said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
25 minutes ago
- Daily Mail
I booked £400 flights for the wrong date - but the agent won't give me my money back
I lost £400 by mistakenly booking flights online for the wrong dates. I booked using an online travel agent that compares flights from different airlines. I didn't realise when I navigated back a page, my dates were switched to the site's default dates. The flight I accidentally booked was a few weeks away, while the one I intended to book had been in three months' time. I'm not able to travel on the former dates. Within minutes, I realised my error and filled in an online cancellation form with the travel agent. This was a Sunday so I couldn't speak to them on the phone. I thought I could get my money back as I read that purchases made online come with a two-week 'cooling off' period. But my request was declined and I'm still out of pocket. Why? T.R Helen Crane, This is Money's consumer champion, replies: The cost of going away has rocketed in the last few years, meaning we are all desperate to get a good deal. When flipping back and forth between internet tabs comparing different airlines, dates and prices, I can see how a mistake like this could be made. You are right to say that, when buying things online, customers usually benefit from a 14-day cooling off period. This is a legal protection. But unfortunately for you, it doesn't apply to plane tickets - or tickets for any other form of transport, for that matter. This is because the companies who sell them argue that, as the tickets are tied to a specific time and date, they would be hard to resell in many circumstances. Essentially, they say having to pay back any customer who asks within two weeks would leave them at an unfair disadvantage. Having a 14-day 'get out' clause would also encourage holidaymakers to game the system, as they'd be able to cancel and re-book if they saw prices had dropped. When denied a refund they feel they deserve, a savvy consumer might turn to their credit card provider - if they paid using one - hoping to be protected by Section 75 of the Consumer Credit Act. However, that is unfortunately also not possible in your case, as consumer expert Scott Dixon explains below. So what options are open to you, if any, to recoup your £400? I asked Dixon, who runs the website The Complaints Resolver, to explain the rules and what you can do. Scott Dixon replies: Unlike most online purchases, flight bookings are exempt from the standard 14-day cooling-off period under the Consumer Contracts Regulations 2013. This means that once you have confirmed and paid for your flights, you are generally locked in, even if you have made a mistake. The reason for this is because flight tickets are time-sensitive and perishable. Airlines argue flights are time-specific services that cannot be easily resold if cancelled, and are subject to dynamic pricing, meaning that fares can fluctuate rapidly. Airlines operate on tight margins and aim for maximum seat capacity, so changes can disrupt their logistics and financial position. This exemption is set out in Regulation 28 of the Consumer Contracts Regulations 2013, which lists the circumstances where cancellation rights do not apply. This includes accommodation, transport, vehicle hire, catering and leisure services, if the contract is tied to a specific date or period of performance. In plain English, if you book transport like flights, trains or buses for a specific date or time, the 14-day cancellation right does not apply. That's why consumers cannot legally cancel a flight just because they changed their mind or made a mistake, even within 24 hours of booking. If you have made a booking error (like selecting the wrong date), you are relying on the airline's goodwill. Some airlines such as British Airways, Virgin Atlantic and American Airlines may allow a 24-hour grace period to amend or cancel without penalty, but this is a voluntary policy and not a legal right. Section 75 protection under the Consumer Credit Act 1974 only applies if there has been a breach of contract or misrepresentation, and only when you book direct and spend over £100. It doesn't apply to mistakes made by consumers. Travel insurance typically won't cover this, unless a specific cancellation clause applies in the terms and conditions. Always double-check your dates and details before you proceed. If things do go wrong, be polite but persistent and contact the airline directly as soon as possible. You are relying on staff goodwill, so be nice if you need to ask for their help. Politeness and good manners costs nothing, yet it can make the difference between you getting the outcome you want or the outcome you deserve. Helen Crane replies: Unfortunately, it seems this is likely to be a costly lesson. You are out of the 24-hour grace period that Scott mentions, and even then, this is completely voluntary and you don't know if the agent you used would have been willing to offer it. That said, all of this is ultimately down to the company's discretion, so perhaps one attempt at a charm offensive as he describes wouldn't hurt. It is interesting that the three firms he names which may look kindly on customers who make mistakes are all airlines, rather than agents. Personally, I now try to book flights direct with the airline wherever possible, rather than using a third-party travel agent. In my experience this makes life easier when things go wrong, whether that is a cancellation, lost luggage, or a booking error like yours - as you only have one company to deal with rather than two. However, it does often mean missing out on the absolute cheapest deals.
The Guardian
25 minutes ago
- The Guardian
How to manage your money in turbulent times, from savings to mortgages
It is understandable to be worried about your finances. The world seems to be lurching from one political crisis to the next, and each one has an impact on stock markets and prices. A recent survey found UK consumers are worried about a slowing economy, possible tax increases in the next budget and rising food costs. We asked experts how you should manage your money in an uncertain world. Stock markets around the world, especially in the US, were in flux earlier this year over Donald Trump's tariff plans. Things have settled down now but it is impossible to predict what shocks may be around the corner. If you hold stocks and shares – in an Isa or pension, perhaps – you may have been nervously checking their value. UK fund managers have been increasing their holdings in US companies over recent years, largely fuelled by the boom in tech stocks, so big moves over there have an impact here. However, experts say the most important thing to do is to not sell up out of panic. The analyst Dan Coatsworth of the financial advisers AJ Bell says: 'The worst thing people can do is to see troubling things in the news and then suddenly try to shift around their portfolio.' Markets have recovered in the past, he says, so patience is key. Where this advice may differ is if you need your money for something in less than five years – such as a wedding, university fees or a house purchase. Then you should look at how much risk you are taking, he says. Andrew Oxlade, an investment director at the fund management company Fidelity International, says this could mean switching some of your money away from the markets and into bonds. Bonds are issued by a corporation or country – the investor loans it money in exchange for a fixed rate of interest. They are typically bought through a fund. Many investment management companies offer funds that have a split between equities and bonds, such as Vanguard's Lifestrategy 80%. Gold, an investment that is often seen as a safe bet during times of crisis, has tripled in price over the past decade, and many investors now hold a small amount in their portfolios, Oxlade says, after years of poor performance. Investing does not have to mean buying bars or coins – Fidelity says the most direct way for most is through an exchange traded fund that tracks the price of gold. Interest rates in the UK can be affected by what goes on globally. The Bank of England is tasked with keeping inflation down. Before the war in Ukraine started, it had begun to put up rates, and as prices increased, it continued, raising them from 0.25% at the start of 2022 to 5.25% by August 2023, before holding them there for another year. The Bank has been reducing rates and is expected to make more cuts later this year, but the question is when. If you are planning to take out a new mortgage – either to buy a home or as a remortgage – you face a decision about whether to fix for the short or long term, choose a tracker or even to go on a bank's standard variable rate (SVR). Currently, the best-priced two- and five-year fixed deals have a rate of just below 4%. Nick Mendes of the brokers John Charcol says lenders are reducing rates at present largely because of falling swap rates, a key factor in how mortgages are priced. Swap rates reflect what the money markets expect to happen to interest rates in future. 'Fixed mortgage rates are more influenced by swap rates than the base rate itself, which means they are shaped by what markets think might happen in the future rather than what is happening today,' he says. Going on to a lender's SVR in the hope that fixed rates will improve later in the year is a risky strategy as the rates are high, at about 6.5%, and can change at any time and increase your monthly repayments. Tracker mortgages are also worth considering, Mendes says. These are linked to the Bank base rate. 'They tend to start lower than SVRs and often come without early repayment charges, which means borrowers can move on to a fixed deal later,' he says. Mendes says people who are remortgaging should not 'sit back and wait. Most lenders allow you to secure a new deal up to six months in advance, which is a smart way to hedge your bets,' he says. 'You can lock in a deal now as a safety net and still switch to something better if rates improve before the new deal begins.' For new buyers, Mendes says they should base decisions on what is affordable now rather than making assumptions about what may or may not happen in the future. 'The last position anyone wants to be in is having overstretched themselves on the assumption that they will be able to refinance on to something cheaper at the end of their fixed-rate period,' he adds. You are not tied to a rate until completion, so you should be able to switch if a better deal comes along. Savings rates could fall even before the Bank reduces the base rate, says Rachel Springall of the financial information site Moneyfacts, as account providers may decide that they have enough deposits for a certain product. 'If the whole market starts moving in one direction, you'll find that other peers will do the same because they don't want to put themselves too high up [in best buy tables],' she says. Until then, easy access and fixed-term rates are competitive, Springall says. The best rates this week for fixed one-year and two-year bonds are from Cynergy Bank (4.55% for the one-year and 4.45% for the two-year), while an easy access account from Chase offers 5%, although this includes a 12-month bonus and is a variable rate, so it could go down. There have been increases in the interest paid on fixed-rate bonds in recent weeks, she says. Anna Bowes of the financial advisers The Private Office says 'now is a really good time for a saver who has not been paying attention to their savings' as there is good competition in the market. If you have money in a variable-rate account it may be a good time to move it to a fixed rate. The tumultuous times that stock markets have been having since the start of the year will have had a direct effect on many people in the UK through their pensions. Often funds are heavily invested in US stocks, so the ups and downs there could be affecting your retirement saving. It is understandable if you are considering shifting money in your pension into other safer options such as bonds, says Helen Morrissey, the head of retirement analysis at the financial advice company Hargreaves Lansdown. However, unless you are cashing in your pension within the next five years, you should avoid reactions based on the international turmoil, she says. 'Over the course of your saving journey, you will hit several periods of market volatility and it's important to keep in mind that markets do recover over time,' she says. 'Making kneejerk reactions such as changing investment strategy has the potential to lock in losses as you miss out when markets do recover.' Workplace pensions are often invested in 'lifestyling' funds, which reduce the amount of risk as the holder gets older by shifting from equities to bonds. So if you are approaching retirement this may be happening automatically. If your fund has been hit by turbulence in the markets and you intend on retiring soon, Morrissey says that you may want to start to take a lower amount out from your fund than you had planned in order to allow the rest to recover from any losses caused by market turbulence. 'We suggest that people in [income] drawdown keep between one and three years' worth of essential expenditure [from their savings] in an easy access account that they can use to supplement their income during times of turbulence,' she adds. Another option, on retirement, is to invest some or all of your fund in an annuity, where returns are close to all-time highs. Annuities convert a lump sum from your pension into a regular guaranteed income for the rest of your life or a fixed term. A healthy 65-year-old can now get an annuity rate of 7.72% on average, according to the pension provider Standard Life – that means that for every £100,000 invested, they would get an annual income of £7,720. About 21 million households will see their bills decrease after the price cap was reduced this week. For a household with typical usage, the cap has dropped by £129, to £1,720 a year. The good news may not last too long, however, as there are predictions of increases in October. After the recent conflict between Iran and Israel, oil prices went up because of concerns that supplies could be affected by threats of a blockade of the strait of Hormuz. Prices later reduced after a ceasefire deal was agreed. Will Owen of the price comparison website Uswitch says the volatility of the international economy has led to uncertainty. 'We are now seeing predictions from various organisations and energy suppliers that the price cap from October onwards will probably go up,' he says. To protect yourself against a rise you could considered a fixed-rate tariff – with these each unit of energy and the standing charges are set for a certain length of time. The MoneySavingExpert site advises that you are 'very likely' to save if you can find a fixed-rate deal priced at least 5% below the current price cap, which is predicted to fluctuate. The current best deals are a 12-month fix from Next that is 8.8% below the cap, another from Outfox Energy that is 8.1% less and then a fix from EDF Energy that is 7.2% less, according to the site.
The Independent
2 hours ago
- The Independent
The real risk to Trump from his big beautiful bill won't come from Elon Musk
With the bang of a wooden gavel, the House of Representatives gave Donald Trump the stunning victory he wanted after intimidating the hell out of any Republican congressmen or women who flirted with the idea of defying the president's wishes. You can only imagine that 3,000 miles east of Washington a man in Downing Street looked on with helpless envy, because this week has really been a tale of two cities. In London, Keir Starmer has had to suffer the ignominy of his backbenchers shredding his authority by sticking two fingers up at him repeatedly as though he were some hapless supply teacher brought into an inner London comprehensive for the day. The MPs forced concession after concession over a welfare bill that has been so gutted that an extra £5bn will need to be found to stop the ballooning of our deficit. While in Washington DC, the president's 'One Big, Beautiful Bill' – the OBBB – will add a staggering, eye-popping, head-spinning, jaw-dropping, nausea-inducing three trillion dollars to the US deficit and yet lawmakers decided – without too many qualms – that keeping on Trump's right side was more important than any considerations about the massive economic risks this legislation represents. There was, it should be noted, a strong countervailing force in all this, and that was Elon Musk. The OBBB is what led to his and Trump's nuclear-tipped spat, with the tech tycoon railing against its economic incontinence. Not only that, Musk threatened any Republican lawmaker who voted for it. And has threatened to set up a new political party to – in effect – destroy the Republicans. With the passage of the bill we have at least one question resolved. In the battle of 'who do you fear the most' – the richest man in the world, or the most powerful man in the world – Trump has come out on top. The wee, timorous beasties of the GOP caucus would rather incur the ire of Musk than the wrath of Trump. It remains to be seen whether the Tesla boss will make good on his promise to run candidates against those who backed the president's bill – assuming he gets the chance, after Trump said this week he'd be looking at deporting Musk. So what is this piece of legislation that will now get signed with much fanfare? Well, for a start it is what in the US they call a compendium bill, or omnibus bill. It is not a law just dealing with one thing. It is sprawling. This is a mega piece of legislation. It will bring tax cuts to America's wealthiest; it contains provisions to funnel money towards border security and the Pentagon. And it will take away health provision and free school meals from America's poorest. Think of it as the Robin Hood principle in reverse – it steals from the poor and gives to the rich. Let's go through some of the measures. It will strip healthcare away from 17 million Americans through cuts to Medicaid, the federal government programme that gives coverage to the poorest in America. It will raise healthcare premiums for older adults who benefit from 'Obamacare'. It will take food assistance away from three million Americans and will eliminate school meal access to more than 18 million youngsters. All this to fund tax cuts where the beneficiaries will be the very wealthiest in US society. There are Maga voices who've broken ranks. The uber-Trump supporting senator from Missouri, Josh Hawley, has spoken out passionately against the cuts to Medicaid, and how it will hit people in his state hard. So what did he do when it came to actually voting on the measure? Can you guess? Do you need another clue? Or what about the 'moderate' Republican from Alaska, Lisa Murkowski? She couldn't have been more eloquent. This was a bill, she pronounced, that would not serve Americans' best interests, that it was deeply flawed and was being rushed through to meet a totally arbitrary deadline set by the president of the Fourth of July. It was not fit to be passed in its present form. And, yes, you've guessed it – she voted for it too, just like Senator Hawley. In her bizarre self-justifying statement after voting for the measure, Senator Murkowski said: 'My sincere hope is that this is not the final product. This bill needs more work across chambers and is not ready for the president's desk. We need to work together to get this right." But, of course, by voting for it, she has ensured that the bill has gone straight to the Resolute Desk in the Oval Office for signature. Though kudos to North Carolina senator Thom Tillis, who not only lambasted the bill but has announced he won't run again for office, such is his disgust. And a couple of other Republican senators also split from the president. Nevertheless, this is a massive legislative win for Trump, and a lovely win for all the billionaires who backed him and donated to his campaign and who will now enjoy even lower tax bills. But isn't that to confuse two things? The financial firepower of wealthy donors may have helped Trump get elected. But it was the votes of millions of ordinary Americans – blue-collar workers in record numbers – who elected him and put him in the White House. How are they going to feel about this? An effective Democratic Party (a phrase that feels slightly oxymoronic) would be –should be – making hay. There is one other thing, though, about timing. The tax cuts will come into effect immediately and, yes, while the wealthiest will gain most, a lot of middle-class Americans will gain too. But the politically perilous cuts to Medicaid and the like are being deferred until the beginning of 2027. In other words, just after the November midterms, where Trump's control of both houses would be at stake. This White House is not stupid.
