Emerging market stocks broke a two-year winning run, but were set to end the last day of 2021 on a positive note on Friday boosted by China shares, while Turkey's lira see-sawed in thin trade after hefty losses this week.
MSCI's index of EM shares rose 0.8 per cent to three-week highs as China blue-chips climbed 0.4 per cent, while battered Hong Kong shares jumped 1.2 per cent.
On the year, however, the Chinese indexes lost as a regulatory crackdown in the country had hammered heavyweight technology, internet and gaming stocks, while debt default risks at heavily indebted real estate developer China Evergrande Group hurt the property sector.
The broader EM index is on track to close about 4.5 per cent lower on the year, compared with a more than 25 per cent rise in the US benchmark S&P 500.
Turkey's BIST index which surged more than 60 per cent to record highs this year as stocks were rendered cheap by a lira fall and supported by looser monetary policy, was set to end the year up 27 per cent.
It cut a chunk of losses this month as investors lost faith in the central bank following continued unorthodox monetary policy demanded by the country's President Tayyip Erdogan.
Turkey's lira moved between 13.0 and 13.4 this morning after sinking around 20 per cent this week, giving back a chunk of last week's more than 50 per cent surge that followed some support measures by the central bank.
But the interventions do not tackle the core problem, which should see the currency weaken further, analysts said.
“Inflation will accelerate further amid claims that [central bank] policy rates will continue to decline, while other emerging markets are fighting inflation with often unprecedented rate hikes,” said Marek Drimal, Emea strategist at Societe Generale.
“The lira is therefore likely to weaken further until credibility in inflation targeting picks up.”
The lira is set to end the year down about 43 per cent – its worst year in two decades, and the worst performance among EM currencies.
Inflation will accelerate further amid claims that [Turkish central bank] policy rates will continue to decline, while other emerging markets are fighting inflation with often unprecedented rate hikes. The lira is therefore likely to weaken further until credibility in inflation targeting picks up
Marek Drimal,
Emea strategist at Societe Generale
The US Federal Reserve, signalling tighter monetary policy next year and uncertainty around the coronavirus pandemic, add to local pressures in emerging markets, such as an election in Brazil, new policies under a new government in Chile, geopolitical tensions in Russia, Ukraine and Belarus, among others.
Russia's rouble slipped further towards 75 a dollar after a call between President Vladimir Putin and US counterpart Joe Biden yielded no deal to defuse tensions over Moscow's military build-up near Ukraine. Putin warned against more US sanctions.
The rouble is down about 0.8 per cent this year, with higher oil prices cushioning the fall for the exporter. Russian stocks gained 15 per cent in 2021.
South Africa's rand was flat and looked to end the year down about 7 per cent. South Africa said it passed the peak of its fourth Covid-19 wave and lifted a midnight to 4am curfew on Thursday.
KILLING OF QASSEM SULEIMANI
Sholto Byrnes on Myanmar politics
Mohammed bin Zayed Majlis
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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Medicus AI
Started: 2016
Founder(s): Dr Baher Al Hakim, Dr Nadine Nehme and Makram Saleh
Based: Vienna, Austria; started in Dubai
Sector: Health Tech
Staff: 119
Funding: €7.7 million (Dh31m)
The five pillars of Islam
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
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Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
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Lexus LX700h specs
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Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
Killing of Qassem Suleimani
The Sheikh Zayed Future Energy Prize
This year’s winners of the US$4 million Sheikh Zayed Future Energy Prize will be recognised and rewarded in Abu Dhabi on January 15 as part of Abu Dhabi Sustainable Week, which runs in the capital from January 13 to 20.
From solutions to life-changing technologies, the aim is to discover innovative breakthroughs to create a new and sustainable energy future.
