Latest news with #InstituteofInternationalFinance
See - Sada Elbalad
3 days ago
- Business
- See - Sada Elbalad
IIF: Egypt's Economy Shows Unusual Resilience Amid Regional Tensions
Taarek Refaat The Institute of International Finance (IIF) has praised Egypt's economic resilience, stating that the country has shown "unusual strength" in the face of heightened geopolitical tensions following the recent military escalation between Israel and Iran. In its latest report, the IIF said the negative impact on Egypt's financial markets was temporary and limited, highlighting that the Egyptian pound briefly weakened during the initial days of the crisis but soon regained partial strength, continuing its gradual depreciation trend. Meanwhile, Egypt's sovereign risk premium remains near its lowest level in five years, reflecting improved investor sentiment and economic fundamentals. Market Composure Amid Regional Volatility The report attributed the relatively muted reaction of financial markets to what it called 'investor desensitization' toward regional geopolitical risks. The MENA region has witnessed two years of prolonged conflicts in Gaza, Lebanon, Syria, and the Red Sea, which have shaped investor behavior. 'Egypt's consistent market performance reflects a tangible improvement in its economic fundamentals,' the IIF noted. Portfolio flows remained relatively stable, despite Egypt's historical vulnerability to volatile 'hot money' entering and exiting its high-yield treasury markets. The IIF observed that Egypt has experienced more episodes of capital flight exceeding one standard deviation than most emerging markets, including Turkey, Pakistan, and the Philippines. However, the report highlighted that March 2024 economic reforms broke this pattern, attracting strong inflows into Egypt's debt market, driven by interest rates reaching 27.75%. Since then, only four months have recorded net outflows, and those were absorbed quickly by subsequent inflows. Investor Confidence Grows, External Dependence Shrinks The IIF said the recent stabilization reflects a shift in funding strategy, as Egypt gradually reduces reliance on volatile portfolio flows to cover its current account deficit, favoring foreign direct investment (FDI) and official financing instead. This strategy has been supported by the IMF and Gulf Cooperation Council (GCC) countries, both of which continue to provide essential financial backing. The non-interventionist approach by Egypt's Central Bank in the foreign exchange market also earned praise, as it allowed the pound to adjust freely, enhancing currency resilience and investor trust in market liquidity. Fiscal Strength Persists Despite Suez Setback Egypt's fiscal performance remained strong, with revenue growth supporting the government's target of a 3.5% primary surplus of GDP for the 2024/2025 fiscal year, even as Suez Canal revenues weakened due to regional insecurity. The IIF cautioned that the canal remains a major external vulnerability. Global shipping firms are unlikely to resume normal transit through the Suez Canal until at least three consecutive months of security stability in the Red Sea, pushing any full revenue recovery into early 2026. Gas Disruptions and Summer Strain The report also addressed the temporary gas export suspension from Israel in June, which led to power cuts in Egyptian factories, particularly in the steel and fertilizer sectors. The government prioritized residential electricity use amid tight supplies. Although the measure was short-lived, the IIF warned that the summer season, combined with declining domestic production and reduced gas imports, may force difficult policy choices in the coming months. Tourism and Reform Risks Loom Tourism—a critical foreign currency source—has shown impressive resilience in recent years but remains at risk. Any direct attacks on Israel could impact tourism flows to Egypt's nearby resorts, the report warned. Internally, the IIF identified slippage on economic reform as Egypt's greatest risk. The IMF postponed its fifth review of Egypt's loan program and merged it with the sixth review, scheduled for autumn 2025, due to concerns over delays in the privatization program. The program is seen as a cornerstone of Egypt's international financing structure, particularly in attracting continued support from the IMF and Gulf states. Debt Market Faces Structural Challenges Despite progress, Egypt's public finances remain under pressure, largely due to the high cost of local debt. The government aims to extend the maturity profile of public debt by reducing its reliance on short-term treasury bills and increasing bond issuance. However, recent auction data suggests slow progress, with yields on short-term instruments remaining elevated, and geopolitical tensions in June briefly lifting risk premiums before easing again. 'Any renewed escalation in the region could revive those premiums,' the IIF warned, potentially complicating Egypt's efforts to reduce debt servicing costs. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Videos & Features Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War News "Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence" News Flights suspended at Port Sudan Airport after Drone Attacks Arts & Culture Hawass Foundation Launches 1st Course to Teach Ancient Egyptian Language Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream
Business Insider
14-06-2025
- Business
- Business Insider
South Africa stock loses $3.7b as foreign investors withdraw from its market
South Africa, Africa's largest economy, is currently experiencing its most prolonged streak of foreign equity outflows in five years, with investors withdrawing a substantial $3.7 billion from the local stock market since October 2024, a data released by the Institute of International Finance (IIF) showed. South Africa is experiencing significant foreign equity outflows, with $3.7 billion withdrawn since October 2024. Economic stagnation and declining per capita income are contributing to foreign investor hesitancy. Emerging markets like Brazil, Turkey, and Taiwan are attracting more inflows, contrasting South Africa's volatile foreign investment trends. A Reuters report noted that the recent withdrawal, amounting to nearly double the $1.9 billion in outflows recorded from 2023 to early 2024, underscores increasing investor hesitation towards stocks listed on the Johannesburg Stock Exchange (JSE), despite its status as one of the world's top-performing markets this year. According to Bank of America, South African equities have delivered a 29% return in dollar terms year-to-date, ranking among the global top five performers, behind only Greece, Spain, Germany, and Italy. However, this strong performance has not translated into sustained foreign interest. Graham Tucker, portfolio manager at Old Mutual Investment Group, observed: "Investors are looking to diversify outside the U.S., but that doesn't automatically make South Africa a top destination." He added that South Africa's stock market appears cheap, but this pricing reflects over a decade of economic stagnation and declining per capita income, which underlies the cautious investor sentiment. Emerging market shift excludes SA Meanwhile, the broader emerging market landscape is witnessing a resurgence in certain relative stock markets. According to IIF data, countries such as Brazil, Turkey, Taiwan, and South Korea are attracting increasing capital inflows as fund managers diversify away from US assets. In contrast, South Africa risks being left behind in this trend. Although the JSE has seen higher trading volumes in recent weeks, foreign investment remains volatile. Exchange data shows that in the previous week, non-South African investors bought stocks worth over 30 billion rand (approximately $1.6 billion), reportedly the highest in years, but sold about 24.7 billion rand ($1.3 billion) during the same period. With just a few weeks into the second half of 2025, non-resident investors have been net sellers of $5.9 billion in equities, nearly $1 billion more than during the same period in 2024. Tucker further commented on the situation, noting: " Foreign investors tend to behave like tourists. They'll come for a trade, especially in gold stocks when the commodity is booming, but they won't stay without long-term policy certainty." While the South African stock market continues to record gains, the country's economy remains fragile, as evidenced by stagnant GDP growth in the first quarter of 2025, largely due to six consecutive months of contraction in the mining and manufacturing sectors.
Time of India
02-06-2025
- Business
- Time of India
Global markets on edge as U.S. debt skyrockets — contagion threat looms, says Institute of Finance
As America's debt load increases, the effects will not just be felt in the United States but will have a global impact, as per a report. The Institute of International Finance (IIF) has highlighted that borrowing costs in some countries like the US create volatility in Treasury bonds that has a ripple effect in other debt, as per Fortune. US Borrowing Ripple Effects Felt Worldwide IIF economists cautioned that 'The implications of rising U.S. debt levels are not limited to the domestic economy; they are also likely to trigger significant contagion and spillover effects across global bond markets ,' quoted Fortune. ALSO READ: Jensen Huang to offload $800 million in Nvidia stock — is the AI king sensing a storm ahead? Major Economies Move in Sync According to the report, IIF's economists have highlighted that, there has been a pattern of sovereign yields moving together, particularly in the United States, United Kingdom, Germany and France, 'reflecting the deep interconnections among these economies through trade and capital markets." Emerging Markets Are Most at Risk IIF also cautioned that the consequences of America's growing debt might be particularly harsh for emerging economies, which are already struggling with more restricted access to foreign capital, according to the report. Live Events ALSO READ: Italy's Mount Etna volcano erupts, triggering aviation alert as tourists flee for their lives — 10 key points The economists wrote that, 'With the U.S. and Euro Area accounting for over 60% of global cross-border debt portfolios, emerging markets and developing countries represent less than 7%—with many individual countries accounting for only a fraction of a percent,' as quoted by Fortune. US Budget Concerns Add to the Fear Concerns about the US debt have increased recently because the Republican budget bill moving through Congress is projected to add trillions to the budget deficit in the coming years, as per the report. FAQs Why does US debt matter to other countries? Because global financial markets are connected, the changes in US borrowing costs can influence rates in other nations. Which countries are most affected? Major economies like the US, Germany, and France are closely linked, but emerging markets may suffer the most.
Techday NZ
19-05-2025
- Business
- Techday NZ
MirrorWeb launches Sentinel to cut false compliance alerts by 90%
MirrorWeb has released Sentinel, a communications supervision solution designed to address the challenge of rising compliance alerts fuelled by digital communication platforms. The increasing use of tools such as Teams, Slack, WhatsApp, LinkedIn and iMessage has led to a surge in data volumes that compliance teams must monitor. According to figures from the Institute of International Finance, 75% of financial firms experienced a 50% increase in compliance alerts during the past year. This overload has created concerns for compliance officers, with 67% reporting that they fear missing critical risks, which could result in fines from regulators. The financial sector has already faced penalties for lapses in compliance, as highlighted when the SEC fined JPMorgan Chase USD $125 million last August for inadequate management of communications compliance. Sentinel, MirrorWeb's newly launched platform, aims to help organisations reduce the number of false positive alerts generated by legacy monitoring systems. In product testing, the company reports reducing such irrelevant alerts by up to 90%. The solution is built using natural language processing and intelligent risk scoring to highlight genuinely risky communications, rather than relying on basic keyword matching. This approach enables the system to assess the intent and context behind messages, offering what MirrorWeb describes as a more accurate identification of potential compliance risks. Key features highlighted for Sentinel include intelligent risk scoring, a pre-configured scenario library, comprehensive conversation capture, audit-ready reporting, and security features designed with privacy in mind. The risk scoring function analyses communications for intent, sentiment, and likely impact, allowing teams to focus resources where they matter most. The scenario library covers over 110 scenarios across eight risk categories, while the conversation capture function records entire threads, including message edits and deletions, to provide investigators with full context. Every alert flagged by Sentinel is accompanied by reasoning that references specific policy requirements. This is intended to help compliance professionals prepare for regulatory audits and inquiries. Security measures are also emphasised; all communications data is encrypted, not used to further train AI models, and is managed under standards such as SOC 2 and ISO 27001. Jamie Hoyle, Vice President of Product at MirrorWeb, said, "Compliance has evolved beyond just ticking boxes; it's about making informed decisions that safeguard the business. Sentinel helps customers cut through the noise, focusing on real risks - the needles in the expanding data haystack. We have worked with our customers to develop innovations that meet their needs and address today's most pressing compliance challenges." "Our Risk Scoring system and comprehensive Scenarios Library minimise the burden of false positive alerts, providing compliance professionals with the clarity and confidence to efficiently manage today's spiraling communication risks." As supervised communication channels become ever more pervasive in regulated industries, companies face mounting regulatory scrutiny. Tools such as Sentinel are positioned to support compliance efforts by focusing investigative attention on genuinely high-risk content and offering audit-ready data for regulatory review.
Axios
16-05-2025
- Business
- Axios
How Trump's China attitude is similar to Biden's
In most policy areas, the Trump administration is seeking sharp 180-degree turns from Biden-era policy. But there is one quiet way Treasury Secretary Scott Bessent is picking up where his predecessor left off: urging China to reset its economy. Why it matters: Behind the Trump administration's volatile tariff policy is the same frustration that simmered among Biden-era economic officials — and a continued push to get the nation to change. For too long, American officials believe, China has been exporting its way to growth, swamping the world with its goods in ways that have harmed domestic industries. What they're saying:"Chinese goods are consumed in China, and then they export the excess to the rest of the world," Bessent told CNBC this week. Last month, Bessent said that the world's second-largest economy was "built on exporting its way out of its economic troubles." "China needs to change. The country knows it needs to change. Everyone knows it needs to change. And we want to help it change because we need rebalancing, too," Bessent said in a speech at the Institute of International Finance. The big picture: In the past two decades, China's economic growth has largely been powered by its manufacturing might. But domestic consumption of those manufactured goods is sluggish: Its population has a significantly higher savings rate than much of the rest of the world, a result of the nation's lackluster social safety net. That dynamic has worsened since the pandemic and China's property crisis. Its reliance on global exports has sparked more efforts, especially from the U.S. and Europe, to choke off subsidized goods to try to shield their own industries. Flashback: The Biden administration was adamant that China needed to reduce subsidies for heavy industry and encourage domestic demand. "I am particularly worried about how China's enduring macroeconomic imbalances ... will lead to significant risk to workers and businesses in the United States and the rest of the world," former Treasury Secretary Janet Yellen said in a speech in Beijing this time last year. "China is now simply too large for the rest of the world to absorb this enormous capacity." Yellen said that China could take steps to "boost demand ... to see a larger share of GDP approved to households to bolster their income." Yes, but: The Biden administration used more narrowly targeted tariffs — focused on strategically significant industries like electric cars, semiconductors, and solar cells — to try to change Chinese behavior. The Trump administration is applying tariffs across the board. The intrigue: Bessent said this week that the previous 145% tariff rate on Chinese goods meant that those exports originally intended for the U.S. were "going to leak to the rest of the world."
