Emerging markets meet new 1998

Emerging markets meet the new 1998

markets end the year in a free
fall. From Russia to Venezuela,
Thailand to Brazil collapsing shares,
bonds and currencies. Russian ruble
quickly ran down, breaking
threshold of 64 dollars and 82 euros. National
regulator night inflated interest
rate by 6.5 points at once. Venezuelan
national bonds fell in price
less than 40 cents, but the stock of Thailand index
yesterday showed the most dynamic drop
for 11 months. corporate debt
Brazilian market threatened collapse due
State oil supplier,
Petroleo Brasiliero SA.

All this causes
very familiar feeling: something
already in 1998, when oil fell,
and raw materials exporters – Russia and Venezuela
– slipped into a financial crisis.

Since then,
emerging markets, much has changed:
countries have accumulated large foreign
reserves and work more flexible exchange
courses. However, signs of infection
apply. Last week
investors pulled more than 2.5 billion dollars
American stock exchange index
Funds, which work with the shares and
emerging market bonds. it
the largest outflow since January, when
Financial investors and scared
political instability in various
countries from Argentina to Turkey.

“We have moved in
Elimination mode, “- Peter says
Lennigan, an analyst at Emerging Markets
at CRT Capital Group LLC in Stamford.
– “We are at a point where people get rid and
from winners and losers from the market “.

tracking 20 emerging currencies
markets fell today to more than
a ten-year minimum. he undermined
falling oil prices and slowed
growth in China. The Turkish lira has updated
historical lows, Indonesian
Rupee fell to the lowest level
that same 1998.

index of emerging
MSCI markets fell today
for the seventh consecutive day. The depth of the fall
It has already reached 8%, but the volatility index
these same markets jumped to the
High-October level. Index
Russian shares, RTS, plummeted yesterday
10% – is the maximum since the annexation

In Venezuela, there are
All indications are that the collapse in oil prices,
strongly supported and blown
OPEC, will lead to a national default.
It is possible that the country will not be able
fulfill its obligations under
dollar bonds.

In the next
Brazilian oil producer Petrobras,
the largest international borrower
in developing countries over the past
five years, has reduced the price of its shares up
a record level. It happened after
the company delayed release
its financial results for the third
quarter – for the third time. is
investigation an unprecedented level
Money Laundering through the company, Brazil
It is under the yoke of corruption
scandal that has spread
virtually every major firm in
which has a joint business with Petrobras.

investors in
emerging markets still lose
more, if the oil price will go
down further and the Fed clearly point to the fact
that the American regulator rate
grow up sooner than expected.

the number of investment strategies
was based on the fact that the interest
the rate will remain low for a long
time, and the high price of oil, “- says
Maykl Rosh, strategist Seaport Group
LLC. – “It is a matter of concern.”

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