| LONDON, June 9
LONDON, June 9 Emerging stocks inched to new
two-year highs on Friday and were set to end the week in the
black but Qatar's riyal fell further in the offshore forwards
markets after a rollercoaster week that saw its stocks lose 7
Overall emerging markets were kept in check by a firmer
dollar and weaker Chinese factory gate prices that again cast
doubts on economic growth, but MSCI's emerging equity index
hovered near flat for a half-percent rise this week.
Qatari stocks had stabilised on Thursday after sharp falls
but pressure on its currency and bonds showed little sign of
abating, with one-year dollar/riyal forwards hitting the lowest
since December 2015 in offshore trade.
The riyal has traded as low as 3.7 per dollar in onshore
forward markets, Thomson Reuters data shows, a record
low, and some 1.6 percent below its spot pegged rate.
"There is a bit of a spike but Qatar has plenty of reserves
to fight the attack on the currency, so we don't think a de-peg
is on the cards," Societe Generale strategist Regis Chatellier
said. He ruled out defaults despite pressure on Qatari bonds.
Sovereign credit default swaps (CDS) also rose to a new
seven-month high of 101 basis points (bps), almost double
week-ago levels, according to IHS Markit.
Saudi CDS touched their highest since February, indicating
some spill over to the rest of the Gulf but this also is not
expected to be serious.
"Obviously this is not a positive story for ... any of the
other countries ... it has a negative impact on the image of GCC
(Gulf Cooperation Council) as one unit and it makes it
potentially more difficult to implement reforms overall," MUFG
strategist Trieu Pham said. He noted the GCC plan to implement a
value-added tax from next year.
But a positive global backdrop would limit the fallout, he
said. "We see that even Qatar (assets) has not gone through the
roof. At this point everything looks controllable so I don't see
it spilling out (of the Middle East)."
Elsewhere, the Czech crown jumped 0.4 percent to a new
three-year high versus the euro, with
higher-than-expected May inflation data pointing to possible
monetary tightening later this year, and contrasting with the
European Central Bank's (ECB's) dovish stance
Czech bond yields rose across the curve, with five-year
yields hitting 10-day highs.
Elsewhere, investors are carefully watching developments in
Venezuela, which missed a $30 million interest payment to the
CAF development bank, the Development Bank of Latin America,
days after missing a $1 billion repayment to Russia.
The Ivory Coast meanwhile issued the first euro-denominated
bond sold by any sub-Saharan African country besides South
For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2017, see tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 1020.61 +1.55 +0.15 +18.36
Czech Rep 1010.07 +3.85 +0.38 +9.60
Poland 2344.45 +4.22 +0.18 +20.36
Hungary 35255.12 -15.83 -0.04 +10.16
Romania 8550.16 -123.40 -1.42 +20.68
Greece 780.35 +1.30 +0.17 +21.24
Russia 1043.84 +5.34 +0.51 -9.41
South Africa 45725.04 -8.74 -0.02 +4.15
Turkey 98894.96 +917.42 +0.94 +26.56
China 3158.75 +8.41 +0.27 +1.78
India 31217.71 +4.35 +0.01 +17.24
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.23 26.28 +0.21 +2.97
Poland 4.19 4.20 +0.23 +5.19
Hungary 307.55 307.68 +0.04 +0.41
Romania 4.56 4.56 +0.12 -0.50
Serbia 122.50 122.55 +0.04 +0.69
Russia 56.97 56.88 -0.15 +7.54
Kazakhstan 315.68 314.22 -0.46 +5.69
Ukraine 26.13 26.12 -0.06 +3.33
South Africa 12.93 12.90 -0.20 +6.22
Kenya 103.15 103.35 +0.19 -0.76
Israel 3.53 3.52 -0.15 +9.07
Turkey 3.52 3.52 +0.02 +0.12
China 6.80 6.80 +0.03 +2.15
India 64.33 64.24 -0.14 +5.62
Brazil 3.26 3.26 -0.00 -0.23
Mexico 18.23 18.20 -0.16 +13.64
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 318 0 .04 7 90.78 1
All data taken from Reuters at 0932 GMT.
Currency percent change calculated from the daily U.S. close at
(Additional reporting by Claire Milhench; Editing by Louise