Compilation of Frontier Market related articles from across the web between 24th August 2020 and 30th August 2020. Last week’s edition can be found here.

Articles of the Week:

Vietnam: Short Selling Announcement May Boost Hopes of EM Upgrade

Vietnam’s Ministry of Finance released a draft proposal that may allow investors to engage in short selling of stocks when trading. The move has been positively received by market participants as Vietnamese are taking a serious look into ways boosting the country’s chances of being reclassified from a Frontier Market to an Emerging Market by both MSCI and FTSE.

Nigeria’s Latest GDP Results Should Force Shift Away From Oil Reliance

Nigeria’s gross domestic product (GDP) fell by 6.1% in the second quarter of the year, compared with a 1.87% increase in the first quarter of 2020. An unfortunate combination of a crash in oil prices and the ongoing coronavirus pandemic have been the main reasons for the decline in GDP, with the former also contributing a significant proportion of the country’s budget. 

A shift away from its dependency on oil to much more renewable and sustainable sources of energy will benefit Nigeria in the long term. It will provide a degree of diversification which can insulate it from price fluctuation shocks, as well as creating potentially thousands of jobs in both urban and rural areas of the country.

Kuwait Equities Attractively Priced As Country Embarks On Structural Changes

The combination of MSCI’s decision to postpone Kuwait’s upgrade from Frontier to Emerging Market status and the coronavirus pandemic have led to Kuwaiti equities being attractively priced.

Moody’s Downgrades Tanzania’s Rating to B2; Outlook Stable

Global ratings agency Moody’s has downgraded the foreign and local currency issuer ratings of Tanzania from B1 to B2 and change the outlook from negative to stable. Weak governance and policy unpredictability were both cited as the main reasons for the downgrade.

Fundamentals Matter Again For Emerging Market Investors

Emerging market equity and bond markets have enjoyed a rebound in recent months despite the coronavirus pandemic causing havoc in the background, but now investors are taking a look at fundamentals – including changes in both monetary and fiscal policies – in these markets in order to ascertain the scope of opportunities available. 

Statistics of the Week:

• Lebanon’s inflation rate is recorded at 112.39% in July.
• Nigeria year-on-year GDP Growth Rate for Q2 is recorded at -6.1%.
• Iceland’s unemployment rate for July jumps to 6.4% (vs 4.1% previous).
• Consumer Confidence in Argentina increased to 41.3 in August, up from 38.2 in July.

Tweets of the Week:

🇳🇬 Nigeria GDP contracts 6.1% YoY in 2Q20 – not too bad given the double trouble from oil (both price & production) and virus. Non-oil econ (90% of GDP) contracted by 6.0%.

Nigeria has been going slow since 2015: No meaningful growth, high & persistent inflation and FX troubles. pic.twitter.com/DQNmONysL3

— Emre Akcakmak (@akcakmak) August 24, 2020

An #expat exodus represents a double-edged sword for the #GCC, as economies reduce the immediate cost impact of the recession, while they suffer from a setback in key sectors due to shortages of skilled labour. Access our latest report: https://t.co/kHv92hFkDL pic.twitter.com/0X1mDlMwl4

— Arabia Monitor (@ArabiaMonitor) August 25, 2020

The FTSE Equity Country Classification Annual Announcement will be published on Thursday 24th September 2020. The following markets are on the Watch List:

Argentina: Frontier Market to Unclassified Market
Vietnam: Frontier Market to Secondary Emerging Market#FrontierMarkets

— Frontier Markets (@frontiermktnews) August 24, 2020