With Nordic high-yield borrowing costs about 200 basis points higher than in the euro market, investors from Europe are crowding into Nordic junk bonds. Issuance of Nordic high-yield corporate bonds soared 122% in the first quarter from a year earlier to $7.6 billion. (Bloomberg)
The Nigerian Securities and Exchange Commission will begin to register brokers selling stock in foreign companies as many Nigerians are using those assets to hedge against inflation and weakness of the local currency. The central bank devalued the local currency three times within a year while inflation grew at the fastest pace in four years. Dayo Obisan, executive commissioner for operations of the SEC, said this is a concern for the commission because it “creates an avenue for exploitation” of the mostly younger people who are trading these stocks. (Bloomberg)
While German bonds have traditionally been an ultra-safe investment for European investors, some are beginning to take short bund positions as Germany struggles to recover from the latest wave of the pandemic. (Financial Times)
Brexit is causing problems for U.K. fishermen as well as those in financial services. The City of London has been largely shut out of its most important market after negotiations stalled, and fishing’s supposedly crucial status in the Brexit process has not helped the industry, as there was an 83 per cent drop in fish and shellfish exports in January, and trading, while improved, remains down. (Financial Times)
China is moving closer to enacting a Wealth Connect program that will allow funds of up to $23 billion to be invested in either Hong Kong or mainland China, with a $155,000 limit for individual investors. The plan is viewed as a milestone for the liberalization of China’s financial system and adds to existing programs that allow stock and bond markets in mainland China to connect to Hong Kong. China and Hong Kong regulators hope to implement the program in the second half of 2021. (Financial Times)
Singapore-based Grab Holdings Inc.’s decision to go public through a special-purpose acquisition company (SPAC) in a deal valued at $40 billion is setting a precedent in Southeast Asia, with other companies expected to follow the ride-hailing and delivery company’s lead. Gojek and Tokopedia are in merger talks and a SPAC listing is expected to follow. (Wall Street Journal)
Junk-Bond Sales Soar 122% in Nordics as Europe Bids Pile In
Charles Daly and Leo Laikola – Bloomberg
Never before have junk-bond issuers in the Nordic region enjoyed such intense demand, with sales drawing in new buyers from the rest of Europe, including those who usually only touch investment-grade debt.
Foreign Stock Craze Prompts Nigeria to Tighten Leash on Brokers
Emele Onu – Bloomberg
Regulator creates ‘digital sub-broker’ license for firms; Local investors in Nigeria look abroad to protect savings
Nigeria is taking another stab at trying to cool off demand for foreign stocks with tighter regulatory oversight of local brokers. The Abuja-based Securities and Exchange Commission now plans to register brokers selling stocks of foreign companies as more Nigerians pile into the assets to hedge against inflation and currency weakness. An earlier effort last month met local resistance, backfiring after warnings alerting people to risks and threats to sanction local traders.
Investors line up bets against German bonds on pandemic recovery; Shorting Bunds has proven costly in the past, but some now see trouble ahead for Europe’s ultimate safe asset
Tommy Stubbington – FT
Investors are turning against German government bonds, sparking predictions that decades of stunning gains for Europe’s ultimate safe asset is at an end. Bunds — as Germany’s sovereign bonds are known — are the foundation of European markets and a benchmark for the determining of prices on the continent’s assets.
In the Brexit battle of fish and finance, everybody lost; As gunboats gather off Jersey, the supposedly crucial status of trawlers during negotiations has not done them much good
Helen Thomas – FT
Now remind me: which was it that we prioritised in the Brexit negotiations? Fish or finance? It is hard to tell at this point. On the one hand, there is the financial services sector that accounts for nearly 3.5 per cent of gross domestic product and 2.3m jobs. It is largely shut out of its most important market, its preferred relationship with Europe never having got as far as the negotiating table.
China edges closer to wealth link with Hong Kong; Scheme could results in tens of billions of dollars flowing between markets
Thomas Hale and Tabby Kinder – FT
China has moved a step closer towards a scheme that could result in tens of billions of dollars in household savings flowing into Hong Kong, marking the latest effort to integrate the country’s financial system into global markets.
Grab’s Huge SPAC Merger Heralds Asia’s Next Tech Boom; The Southeast Asian ride-hailing and delivery app is going public in the U.S. at a $40 billion valuation and others look likely to follow suit
Jing Yang – WSJ
For Southeast Asia’s technology industry, Grab Holdings Inc.’s record-breaking deal to go public via a SPAC is a watershed moment. Bankers and investors have long talked up Southeast Asia’s potential, and venture-capital funds have poured billions of dollars into the region. But so far, few of those investments have translated into big paydays from large listings or takeovers. And stock-market investors have had few ways to get in on the action, apart from the gaming and e-commerce group Sea Ltd.