The Surinamese government and the IMF agreed to work on modifying the criteria for the Extended Fund Facility.

Almost a year after the EFF approval, the government is well behind on the compliance of most agreed structural benchmarks.

There are structural conditions in Suriname that limit the government's ability to implement program reforms. Still, it seems, more often than not, that there is a lack of political will to deal with them.

Recently approved FX intervention measures are a step back to achieving a fully flexible exchange rate determined by the market.

SELL: In our view, overly high prices skew the ri...

There are growing political risks due to the division of the ruling coalition.

We maintain our overall balance surplus forecast of 0.1% of GDP, and a primary surplus of 2.0% of GDP, complying with the 1.7% goal initially required by the IMF.

Although the delay in the IMF disbursement would not have an impact on the budget, it increases fiscal vulnerabilities.

We improved our economic growth outlook for 2022 to 2.2% from 1.2% thanks to the commodity bull market.

SELL: In our view, overly high prices skew the risk/reward on the bonds to the downside, as they reflect only the most optimistic scenarios and not the poten...

The National Assembly finally approved the supplementary budget for 2022 on May 19.

The government reduced the budgeted fiscal deficit from -2% to -1.1% of GDP, while the primary deficit remained at 1.7%.

Budgeted revenues depend on high oil and gold prices.

We believe that it is unlikely that the government will succeed in introducing VAT next month.

SELL: Bonds remain stable between 70-72 cents, which caps the upside even if the restructuring is conducted on favorable terms to their holders.

Guyana's oil production is growing steadily thanks to the start-up of Liza Phase 2.

We estimate that the average oil output will double this year.

The government is considering creating a state oil company to get higher profits from the oil sector.

At first glance, it seems like a risky measure due to the country's little experience in the oil sector and the poor performance of state oil companies in Latam.

A bondholder group in control of 75% of Suriname’s Eurobonds presented a restructuring proposal that would backload repayment to achieve higher recovery values than those offered by the government.

Bonds are trading at 70-72 cents on the dollar, while the government’s latest proposal implied a 42% recovery value to be enhanced by contingent Value Recovery Instruments.

Although details on the proposal presented by the bondholders remain limited, our estimates put the implicit recovery value roughly in line with current bond prices.

We reaffirm our SELL recommendation due to a risk/reward profile that is skewed ...

We believe that the government met the end-March performance criteria.

However, there are significant delays in meeting the structural benchmarks.

We believe that the IMF Board will approve the second review of the program in June.

There are rising downsides risks regarding the program implementation related to the growing tensions between President Santokhi and Vice president Brunswijk.

Without any updates on the restructuring negotiations or price changes to motivate a rethink of the credit, we maintain our SELL recommendation.

Commodity prices have surged after the Russian invasion of Ukraine, boosting Suriname’s gold exports.

We are optimistic about the outlook of gold production since the factors that hurt performance last year have eased.

However, the rising cost of oil and other commodities has put pressure on imports and domestic prices.

We believe that the increase in gold exports will be enough to offset the higher imports caused by the rising prices of oil and other metals.

SELL: No major updates on the restructuring negotiations, but we continue to believe that Surinamese debt looks unattractive given high cash prices.

We will be following developments in the oil sector and pay special attention to the final investment decision by Total and Apache.

While we do not expect much political instability this year, there are risks of social unrest due to the IMF-sponsored economic reforms.

We estimate that the primary surplus will increase to 2.0% of GDP, complying with the 1.7% goal initially required by the IMF.

We believe that Suriname will register modest growth in 2022 (1.2%) as the government will implement an austere fiscal policy.

SELL: In our view, prices already reflect the most optimistic scenarios for a restructuring, wh...

On November 3, the Inter-American Development Bank (IDB) executive board approved a package of loans for USD 450mn for Suriname.

Although the government stated that these resources are "independent of any cooperation with the IMF", but this might be stretching the truth

If the IMF agreement is not reached, the government of Suriname would only receive USD 72mn.

The finance minister said that Georgieva pledged to do her best to bring the program for discussion to the IMF’s board as soon as possible and indicated it would be a matter of a few weeks.

We maintain our baseline scenario that the finan...

The Santokhi administration submitted the 2022 draft budget to the National Assembly, in a context in which the government continues to face a lack of funding.

We estimate that expenditures will end at 26.2% of GDP in 2021 and not at the 32.6% estimated by the government, therefore, spending as a share of GDP will actually end up being higher in 2022 than in 2021.

Our baseline scenario is that the IMF will approve the financing agreement in the next few months and the government will obtain two disbursements next year.

However, we believe that the main obstacle to agreeing on a financing program with the IMF is reaching a...

It’s been four months since the IMF reached a Staff-level agreement with Suriname but the Executive Board has yet to approve it

USD 500mn from IDB loan will be confirmed after the IMF’s Executive Board approves the EFF program

The Surinamese government has started implementing the agreed reform plan despite not having IMF financing yet.

Fiscal spending measured in US dollars decreased by 12.2% YoY in 2020 and accumulates a fall of 44.0% YoY until May

SELL: Current prices reflect an extremely positive view of the forthcoming bond workout that clashes with demands from the official sector and make the risk...

The growth in exports in recent years seems to be driven mainly by the increase in the price of gold and not by an increase in production

The main partner of Rosebel, Iamgold, announced that the company’s gold production was 88,000 oz in 2H21, 30.2% less than the 2H20

Newmont announced that the Merian mine's output was 216,000 oz in 2H21 (6.5% less than 2H20)

As economies recover, the price of gold has lost some ground, posing a downside risk to Suriname's external accounts and tax revenue.

SELL: Current prices reflect an extremely positive view of the forthcoming bond workout, which make the risk/rewa...

On average, electricity subsidies were equivalent to USD 141mn (about 3.7% of GDP) per year from 2015 to 2019.

Since early June, the government has tried to introduce a reform to reduce the subsidy to the electricity sector.

The government decided to reformulate the first proposal, after the Surinamese massively rejected it

We estimate that the subsidy would reach USD 128mn without the reform, if the government keeps the subsidy at USD 23.5mn, it will save USD 105 mn per year, equivalent to 4.8% of GDP.

SELL: There are no news about the restructuration and current prices make risk/reward unattractive.

Suriname presented an initial restructuring offer, which includes extremely harsh principal haircuts that are wildly inconsistent with bond prices that remain above 60 cents on the dollar.

The proposal involves a 70% principal haircut, a front-loaded step-up coupon structure, and a 5-year amortization ending in 2029. At an 11% exit yield, this implies a 21.3% recovery value.

We find that the proposal results in a very low-duration bond that would make recovery values very insensitive to future spread compression.

Furthermore, official economic projections ignore the potentially transformative impact of oil discoveries. We...

The Central Bank abandoned the crawling peg and adopted a floating scheme.

The gap between the new official rate and the parallel market was closed.

The Central Bank also introduced a monetary targeting policy. We believe that this policy is adequate to control inflation.

The growing social discontent and the search for quick results could weaken the government's commitment to the program.

SELL: In our view, the risk/reward balance is unattractive at current prices, which are discounting an extremely positive outcome as the base-case. 

The recovery program agreed with the IMF proposes to abandon the fixed exchange rate, which we evaluate positively.

With major significant cuts, the government intends to reduce the primary deficit from -10.2% in 2020 to -1.8% in 2021

Along with fiscal policies, the government proposes a debt restructuring plan, whose main objective is to reduce the debt/GDP ratio to 60% by 2035.

In addition to the economic challenges, the government faces the highest level of coronavirus cases since the start of the pandemic.

Although the agreement with the IMF is good news, some bondholders see their lack of input on the final dea...

We estimate that nominal GDP would grow in a range between 30.7% to 75% in the first year of offshore oil production

The government of Suriname would receive around USD 640 mn in oil revenues in 2026, 24.9% of the current GDP.

Nominal GDP growth could dilute public debt from the current level of 140% of GDP to 71%-95%

Those benefits would hopefully come in 2026 when oil production fully starts, and the government has not a strong fiscal position to wait until that time

SELL: Current prices look overtly optimistic in our view. Any sustainable deal is likely to require substantial liquidity relief over the short to mi...

The new crawling peg regime established a lower band of 14,290 SRD/USD and an upper band of 16,300 SRD/USD.

The government also established anti-market measures such as mandatory repatriations and foreign exchange surrender requirements for exporters.

We calculate that the net international reserves reach USD 129 mn, enough to cover only around 3 weeks of imports.

The recently announced measures are a momentary solution that does not really tackle the underlying fiscal issues.

SELL: The news about the government measures is not market-friendly, but Suriname's debt remained unchanged in recent weeks due to the lo...

Although President Chan Santokhi hoped that a quick agreement would be reached with the IMF (possibly in late January or early February), the negotiations are still stalled. On February 9, during the last meeting between the technical commission of the IMF and representatives of the government of Suriname, the IMF staff positively highlighted the efforts made by the government of Suriname so far. However, there are two issues on which there is still no agreement: the government budget and the exchange rate regime.

Regarding the first issue, the budget presented by the government is unrealistic. As we explained in our Country Report: ...

While we do not expect much political instability this year, there are risks of protests and social unrest.

We calculate that the fiscal deficit would reach -11.5% of GDP and the primary deficit -6.0% of GDP in 2021

The financing gap will be USD 390mn (15.6% of GDP), and the IMF financing is barely enough to cover about a third of those needs.

We expect real GDP to increase by 3.6%, after falling -14.6% in 2020.

SELL: Although there are not many news about the negotiations with bondholders, Surinamese debt recovered over the past month.

Santokhi's administration has only received four loans, all in local currency, for just USD 28.7 mn

On September 25, the National Assembly approved a modification of the Public Debt Law

By modifying the Law, the government was able to obtain SRD 1,500 mn (USD 105.6 mn) in monetary financing

Monetary financing has resulted in a higher depreciation of the exchange rate and an acceleration of inflation

HOLD: The standstill proposal was approved by supermajorities of the 2023 and 2026 bondholders. The next step is to negotiate a restructuring agreement, which investors seem to have already priced-in

We take a comprehensive look at political risk indicators in a group of Emerging Market countries, trying to identify potential sources of conflict.

We analyze the electoral scenarios in the four Latin American nations that will have electoral processes during the end of 2020 and all of 2021.

We review the scenarios in the parliamentarians of Argentina and El Salvador, we comment on the electoral process that will take place in Venezuela, and we review the perspectives of the presidential elections in Ecuador.

We evaluated the World Bank’s governance indicators for our sample countries in 2019 and share our view of thes...

The government has already carried out some important reforms such as the devaluation of the Surinamese dollar and the increase in the fuel tax.

Broadly speaking, the Santokhi government is proposing a similar recipe to the one that Bouterse made

The difference between the success and failure of the reforms lies in the government’s commitment to fulfilling its program.

The main downside risk is that Santokhi does not have the political and popular support to carry out the reforms.

HOLD: We do not expect a harsh restructuring proposal from the government; hence we deem downside as limited.

The government proposes to increase revenues, from 18.7% to 31.0% of GDP.

On the spending side, the Draft Budget also proposes to cut current expenditures.

Despite the efforts of the new administration, the interest burden is too high to reduce total expenses.

The budget estimates a fiscal deficit of 17.8% and financing needs of 33.3% of GDP. We do not believe that the government can obtain this financing,

The government has hired Lazard to manage the refinancing or restructuring of bonds, which are still pricing-in relatively high recovery values.

The COVID19 crisis could open the door to new sovereign restructurings

In the last decade, sovereign default events carried out for political reasons have increased by 50%

Suriname and Ecuador, with previous complications, this year saw their position even more deteriorated due to the COVID19 crisis and announced restructuring

On the horizon El Salvador, Angola and Sri Lanka are the countries that generate the most concern of those followed by EMFI

The Central Bank of Suriname devalued the official exchange rate from 7.5 SRD/USD to 14.2 SRD/USD, which means a devaluation of -47.2%. 

Broadly speaking, the Central Bank formalizes the fixed exchange rate system that it has maintained since 2016

We maintain our inflation forecast for 2020 at 71%, because it considers an average exchange rate of 12.6 SRD/USD.

There are high upside risks, due to the impact of the adjustment of fuel prices and a potential adjustment of electricity and water services.

We retain our HOLD rating on Suriname’s bonds because at current prices we see limited ...

The government announced a devaluation and this policy decision will play a major factor in the assessment of Suriname’s debt.

The devaluation liquates the domestic debt but, also, opens up some room for new indebtedness.

Local media reports the government is preparing a 7-year, apparently-domestic USD-denominated bond for USD 400 mn with a 5% coupon, guaranteed by the future oil revenues.

We retain our HOLD rating on Suriname’s bonds because, at current prices, we see little downside and significant upside potential.

Pressure grows on China, as one of the world's main creditors, to enter the DSSI without restrictions

The terms of China's agreements with emerging or frontier nations are extremely aggressive compared to members of the Paris Club

One issue to keep an eye on is the participation of Chinese state banks in the renegotiations, as these entities hold about 75% of the country's total debt

Chinese authorities have spoken with 20 countries about the DSSI, and it has approved relief for an amount close to USD 3 bn for 10 countries

Angola and Zambia are the countries that most urgently need to address a restructu...

Santokhi revealed the first findings in Suriname’s public finance. Suriname accumulates a total debt of USD 3.9 bn (SRD 29.5 bn).

Surinamese debt as a percentage of GDP increased from 19% to 87% under Bouterse’s government

According to the IMF, the fiscal deficit went from -3.1% of GDP to -8.6% of GDP from 2010 to 2019

Foreign reserves fell -18.4% during Bouterse’s administration, from USD 690.8 mn to USD 563.5 mn.

We retain our HOLD recommendation given that we see a strong likelihood that Suriname will seek a standstill on its 2026 bond.

Standstills have been the talk of the town since March, but only Ecuador, Suriname and Belize have used them so far.

We look at the similarities and differences between the three cases in order to understand what each country intends to do with them.

BUY Ecuador: Restructuring negotiations are already very advanced and we think the bonds will have significant upside after a deal is closed.

SELL Belize: There is willingness to continue paying after the standstill, but their repayment record speaks for itself.

HOLD Suriname: The outgoing administration negotiated a standstill on their 2023 bond, but we don’t kno...

On July 13, former police chief Chan Santokhi of the VHP party was elected President by acclamation in an uncontested election in Parliament

Santokhi will take, closer to Western democracies, unlike Bouterse’s policy of allying with China, Cuba and Venezuela. 

In general, the new cabinet seems to be composed of competent people with adequate backgrounds for their roles. 

But the government also includes people of dubious reputations like the new vice president, Ronnie Brunswijk, who has a sentence of 6 years in prison for drug trafficking in the Netherlands.

As for the public debt...

The process of defaulting and restructuring usually involves a sharp spike in yields just before the credit event.

Then yields lose their economic meaning and only prices make sense, as they turn into a summary of market expectations for the recovery values.

This period ends when an exchange takes place and the old bonds are replaced by new bonds with a given exit yield

One year after the agreement, yields fall on average 4.1 pp from 12.6% to 8.5%.

This shows that there is potential to pick up price gains by entering a credit just after restructuring, and waiting for spread compression during the first year.

Last Wednesday, Suriname posted a Consent Solicitation seeking to modify some key terms on its 2023 bond.

The request involves a rescheduling of the missed June 30 amortization, currently on its grace period.

 We view this as a positive development for bondholders because it opens the door for Suriname to deal with its liquidity and solvency problems in an orderly way.

The request is essentially a standstill and would help prevent a hard default.

The proposal also signals a turn in economic policy by incorporating the possibility of an IMF package from the outset.

Today the new members of the Assembly took office. An extraordinary meeting was held in which the new president and vice-president of the National Assembly were elected.

Ronnie Brunswijk from ABOP was elected as president of the National Assembly and Dew Sharman from VHP as vice-president

The new coalition wants to make the government transition quickly. According to the DWTonline newspaper, the new coalition agreed with Bouterse that the new government would take office in mid-July

Chan Santokhi of VHP was nominated officially as Suriname's presidential candidate.

Payment on the 2023 bond, which comes due on Tuesday 30, is in peril due to liquidity constraints. The country owes a total of USD 23 mn between principal and coupons.

The central bank had been using private citizen money to cover imports and exchange operations, resulting in net reserves falling to a negative USD 100 mn.

In April, the government increased its long-term debt with the central bank by SRD 4.9 bn (USD 653 mn), a very large amount for the country.

Basic liquidity metrics are somehow positive at face value, but they hide some of the subtle problems with the country.

Our debt assessment is pessimistic giv...

Low interest rates and the hunt for yields of the last decade has left broad swaths of EMs overindebted and vulnerable.

The first half of 2020 is not yet over and we already have 3 countries in default.

The recent record of most defaults on Eurobonds on a single year was 4 in 2017, so 2020 is not far from setting new records.

Eurobond restructuring processes are usually among the most complicated due to the variety of holders and the different interests they represent.

Suriname, Zambia, Belize, Sri Lanka and Angola are in the most risk to engross the default-statistic for the year.

May was one of those months that feels like a year. We had a default in Argentina, a tense election in Suriname, a deadly pandemic still spreading around the world, and yet, it was a good month for emerging market debt

Our EMFI Core Index went up for the first time in 6 months. The biggest winners were Argentina, Angola and Ecuador, while Venezuela, Suriname and Sri Lanka were among the negative outliers that went against the general risk-on mood

The macro and fiscal situations deteriorated further for all countries covered, and we chronicled the dramatic economic crash in our Country Reports

We’ve been preparing fo...

Suriname's debt has increased rapidly and its weight on GDP could hit 104% by the end of the year.

If the opposition takes power, the new government could seek restructuring the country’s debt.

Multilateral loans account for 15,9% of the total stock, while bilateral debt is 13,1%, commercial loans 21,1%, bonds 25,9% and domestic debt 24%.

The new government could choose to tackle bilateral and domestic debt without affecting bonded debt.

Current president Desi Bouterse's National Democratic Party (NDP) got 16 seats out of 51 with 24% of the vote.

If the opposition forms a coalition between VHP, NPS, PL and ABOP, it would get 33 votes. It still would not be enough for a president to be elected.

If the MPs fail to reach an agreement within the National Assembly, the election goes to the Popular Assembly. Taking party-votes into account the opposition would reach 671 votes, much more than the 468 required to elect a president.

Considering Bouterse’s history (he led an authoritarian government after a military coup in the ’80s), and with the t...

As of May 22, 8 countries have at least one USD-denominated sovereign bond trading below 50 cents on the dollar.

The Covid-19 crisis could lead to a new wave of sovereign defaults from prolonged confinements.

We discuss the worst debt restructuring events so far this century.

Argentina 2005 remains at the forefront of these events if we exclude the exceptional cases of countries at war or leaving them.

The countries with the most compromised solvencies that could generate problems with their debt are Angola and somewhat behind, Sri Lanka, El Salvador, Egypt and Pakistan.

The President has had to face several scandals in recent months: corruption allegations, tensions between the government and the private sector have increased.

There has been electoral irregularities, the opposition parties reported that the list of voters included people who had died or did not belong to the indicated address

Opposition parties have also accused Bouterse of benefiting his party during the mandatory quarantine.

In our updated scenario, NDP would get 20 seats, VHP, 17, ABOP, 7, NPS 4 and PL 3. However, we see with medium probability that irregularities will increase on the Election Day ...

A pandemic year was on the cards, the dramatic magnitude of its effects was not.

The global economy is expected to shrink by 3% in 2020, but leading indicators are pointing to a deeper downturn.

Emerging countries with a history of volatile economic growth will show the worst results.

Some economies may experience a period of above-trend growth during the recovery, although the level of GDP will remain, in most cases, below the pre-virus level.

Pakistan is the weakest among the EMFI Countries, in terms of the spread of the virus. Lebanon, Sri Lanka and Barbados are the strongest, with a controlled increase rate and a persistent lockdown.

The countries that we evaluate with the worst economic performance year-to-date are Angola, Venezuela, Lebanon, Barbados, El Salvador, Ecuador, Sri Lanka, Argentina and Suriname.

Since the end of 2019, the local currency has depreciated -70.5% in Venezuela, -52.4% in Lebanon, -43.5% in Argentina and -40% in Suriname.

El Salvador and Argentina launched the most ambitious fiscal program among our sample, which will cost 6% and 5.6...

The safest rung of EM hard-currency sovereign bonds fell on March but has already retraced all their losses.

Mid-quality EMs plunged over March and have risen somehow since, but haven’t fully recovered.

This segment has seen a 320 bps rise in average yield in 2020, going from an average 6.1% yield to 9.3%.

We believe high-yield bonds in our mid-quality group have significant upside if they avert a credit event.

After a dry March, markets are again open for fresh bonds, but only from relatively high-quality issuers.

US stocks rose 12.7% in April, while US investment grade bonds rose 4.6% and EM bonds 4.0%.

Our EMFI Core Index fell 0.9% over the month and is 27.1% down YTD.

The best performers of April were Egypt (+4.7%), Sri Lanka (+4.0%) and Turkey (+3.8%).

The worst performers were Suriname (-26.9%), Lebanon (-14.0%) and El Salvador (-11.3%).

The IMF has approved just over USD 16.0 bn for 61 countries.

Of the 16 countries we follow, 6 have already been granted financing for a combined USD 3.5 bn.

Lebanon and Argentina presented restructuring proposals asking for large debt relief but not offering much adjustment.<...

We identified 23 countries that have at least one bond yielding above 10%, a threshold usually associated with sovereign distress.

Among the most distressed credits, first-time defaulter Lebanon is trading between 16.3 and 18.3 cents on the dollar, on account of slow progress on a reform plan.

Argentina’s debt goes in a range of 23.2 to 34.6 cents on the dollar, days after the Fernández administration’s aggressive mid-April proposal to bondholders was publicly rejected by 3 creditor groups.

Ecuador trades between 28.8 and 33.6, after negotiating a coupon standstill that will give the country until Augus...

On April 15, the G20 agreed on a standstill for bilateral debt service during 2020. Nonetheless, the agreement only applies to IDA-eligible countries. The suspension will be NPV-neutral and will involve repayment over 4 years, including a 1-year grace period.

Multilaterals haven’t found a way to implement a similar standstill. In fact, Fitch Ratings warned them that joining in on the G20 standstill could result in rating downgrades if not appropriately compensated by shareholder countries.

On aggregate, official creditors account for almost 90% of the debt of low-income, and 60% of that of lower middle-income countries, b...

At the beginning of March, the resounding fall in sovereign bonds begin due to the fall in oil prices and the coronavirus outbreak. To this negative external outlook, internal tensions are added.

Reviewing the composition of international reserves we find that only 42% of foreign reserves are liquid (USD 234 mn or 7 weeks of imports). 

Suriname is currently in a scenario that combines three types of shocks. The first is the depreciation of the real exchange rate. We calculate that the real exchange rate has depreciated 36.4% since December.

The second shock is associated with the current account deficit. In 2020...

Two weeks ago, we singled out some early calls for a generalized global debt moratorium in our Global Strategy Viewpoint: Force Majeure. The idea has gained significant traction and is becoming one of the main themes in economic and financial discussion.

While we don’t think a generalized moratorium on commercial bonded debt is likely to succeed, investors should be aware that it is a growing theme and bondholders will probably be under increased pressure to accept attempts at restructuring bond terms.

There are some indications that China is a significant roadblock for the IMF-World Bank initiative for a bilateral debt m...

According to Bloomberg, on April 1, Suriname credit rating was downgraded by Standard & Poor’s (S&P) to 'CCC+' from 'B' with negative outlook. 

S&P estimates that, in the next 12 months, there is at least a one-in-three probability that Suriname could default on its debt obligations. 

At EMFI Securities, we believe that general elections are likely to be delayed as a measure to curb the spread of coronavirus, which would further increase internal conflict.

Suriname has been dragging large fiscal deficits for years. In 2019, the fiscal deficit reached 8.6% of GDP in 2019

The COVID-19 crisis is raising a difficult question of public policy for emerging market economies with low fiscal space, which have to reconcile economic and social policy with debt service.

The relation between liquidity and solvency problems is not straight-forward: the COVID-19 shock, which presents liquidity challenges first and foremost, can unearth underlying solvency problems and can also turn liquidity problems into solvency ones if improperly managed.

We’re already seeing some early calls for an international debt holiday to exempt countries from paying during the COVID-19 crisis. Multilateral organizations are ...

The mining sector is key to Suriname's economy. Gold exports represented an average of 65% of exports in the last decade.

In total, legal gold production would have reached 1.25mn oz in 2019, 6% less than in 2018.

We estimate that gold production will remain relatively stable in 2020, although internal conflicts persist as downside risks.

In 2020, the EMFI Securities forecast for the average price of gold is 1650 USD/oz, which represents an increase of 18.3% compared to 2019 mid-price.

In this scenario, exports would increase by 8% and reach USD 2,390 mn in 2020, also considering a 40% reduction in oil exports.<...

The current crisis will translate into twin demand and supply shocks, with an oil price war on top of it.

The demand shock driven by declines in the world’s main trading partners will particularly affect emerging markets which are characterized by low diversification of exports and production.

Supply chains around the world have been disrupted by factory closures, first in China and now in Europe and the US.

The markets most exposed to a potential slowdown are the major commodity exporters: Venezuela, Ecuador, Angola and the markets most reliant on Chinese and US tourism.

In most EMFI countries the tourism act...

Our EMFI Core Index has fallen 27.6% year-to-date (YTD), while Our EMFI Expanded Index has fallen 19.2%. The last two weeks have been particularly bad, with consecutive 10% declines.

Unsurprisingly, countries heavily reliant on oil have suffered the most. Among our 34-country group, almost every oil-reliant one has fallen more than the 18.3% median.

The second thing that jumps to the eye is that the riskier countries have fared proportionally worse than relatively safer countries, when excluding oil-dependent countries.

We’re also seeing several countries crossing the 10% yield threshold, usually associated with dis...

The outbreak of the Coronavirus, as well as the “oil price war” between Saudi Arabia and Russia have triggered almost complete certainty that a global recession is coming over the next quarter.

Some economists are expecting a 2-quarter rolling recession, but there is potential for the downturn to extend further if the virus reemerges after activity is unfrozen.

Emerging market debt is taking a beating in 2020 so far. The countries we cover registered a median 14.3% fall year-to-date, with the worst performer doing as bad as 60.3% down (Ecuador) and 38.5% down (Angola).

We compare indicators on 4 major categori...

February was a bad month for EM debt, as the market went into risk-off mode pushing bonds to backtrack on the gains made over the previous two months. 11 out of the 15 countries in our EMFI Core Index fell on the month, while the weighted index itself fell 5.8%, retracing below December levels.

Our Expanded Index ex. Core confirms February’s sell-off, registering declines in 21 out of 25 countries and an aggregated fall of 0.9%. Nonetheless, this fall is significantly below that of our EMFI Core Index.

Our selection of countries is clearly biased towards some large and risky high-yielders, which translates to an expectabl...

On May 25, parliamentary elections will take place in the country. In Suriname the National Assembly elects the president (34 of 51 votes are needed).

The latest poll indicates that 77.2% of respondents felt that the current economic situation is worse than 12 months ago.

When asked what grade voters would give the Bouterse government between 2015 and 2020, respondents answer with a rating average of 4.6 of 10

Survey results show NDP and VHP, the main opposition party, would obtain 4 seats each, of the 17 seats corresponding to Paramaribo.

In Paramaribo, NPS would get two seats and ABOP only one and there would be 6...