$ 140 billion worth of sovereign debt issuances expected in emerging...

Goldman Sachs estimates concluded that sovereign debt issuance in emerging markets in 2021 could reach about $ 140 billion, or the same level around this year, with offsetting a surge of high-yield bond sales following a slowdown in the category of investment-worthy issuances.
According to “Reuters”, the bank said that in light of the increasing need for financing as a result of the Covid-19 pandemic, countries classified in the category worthy of investment rushed to issue bonds, which raised the sales of sovereign debt in emerging markets since the beginning of the year to 145 billion dollars, at The highest level of the historical range.
Countries facing the risk of defaulting on their debts have found it more difficult to enter the market, as evidenced by the Turkish sovereign investment fund and Naftogaz last month delaying the sale of bonds due to market volatility before the US presidential election and high borrowing costs.
Goldman Sachs said its outlook for increased issuance of higher-yielding bonds next year partly reflects its expectation of better prospects with improved risk appetite helping countries rated their high-risk debt.
Analysts Teresa Alves and Sarah Jarrat said in a report that high-yield sovereign issuances in emerging markets will rise to about $ 60 billion from $ 45 billion in 2020, in exchange for a slowdown in investment-worthy issues to about $ 80 billion from $ 100 billion.
The two analysts added that the Gulf region and Latin America will likely remain the largest regional emerging market issuers of bonds next year, with sales of about $ 37 billion and $ 32 billion, respectively, followed by Asia.
The bank said that the increase in debt maturities in 2021 indicates the net issuance is still relatively moderate, and it is expected that Saudi Arabia, Qatar, Egypt and Mexico will be the highest in terms of net issuances next year.
In contrast, it is not expected to sell dollar-denominated bonds from Hungary and Croatia, which have switched to financing themselves mainly from the euro or their local currencies, as well as countries that issue high-yield bonds, such as Sri Lanka and Oman, which is due, in part, to the high risk of default.
In addition, yesterday’s data showed that three-quarters of euro-zone government bonds traded on the electronic platform TradeWeb, amounting to 8.9 trillion euros ($ 10.35 trillion), returned negative at the end of October, a record high.
According to “Reuters”, Treadweb said that the market value of the euro zone’s sovereign bonds, whose returns were less than zero, rose to about 6.53 trillion euros, or 73.25 percent of the total market value, at the end of last month.
The figure is as high as 6 trillion euros at the end of September and represents a record high in data going back to 2016.
Tradeweb data also showed that the total value of investment-rated euro-denominated bonds reached 1.37 trillion euros, or about 40 per cent of a market value of around 3.5 trillion euros, at the end of October. That is the highest since August 2019 and up from nearly 29 percent at the end of September.
In addition, US investment bank Goldman Sachs sharply cut its economic forecast for Europe in the fourth quarter of the year yesterday, after a jump in cases of Covid-19 prompted major countries to announce partial closures in November.
The bank said it expected real GDP in the euro area to shrink 2.3 percent in the fourth quarter, a major revision to its previous forecast, which was for growth of 2.2 percent.
He lowered his forecast for GDP growth in Britain to -2.4% from a previous forecast of 3.6% growth.
“We expect the new restrictions to last for three months before gradually lifting them from February on,” Goldman Sachs economists wrote in a note to clients.
Yesterday, Germany tightened restrictions aimed at curbing the outbreak of the new Corona in Europe, which angered residents across the continent, while the Covid-19 crisis intensified in the United States.
The epidemic has infected more than 46 million people worldwide and caused about 1.2 million deaths, while the dangerous outbreak of Covid-19 in Europe and the United States raises more concern about the already deteriorating global economy.
In an effort to control the high number of injuries in Germany, Chancellor Angela Merkel ordered the imposition of a series of lockdown measures from yesterday until the end of the month.
As for England, it is preparing for new home isolation measures, following the steps of Austria, France and Ireland. And many have expressed their concern about the economic cost of the closure, which lasts four weeks and comes into force on Thursday, according to “French.”
The tightening of lockdown rules also began yesterday in Belgium, which has the world’s largest number of Covid-19 infections relative to its population. Portugal also imposed a partial lockdown, which will take effect tomorrow.
In France, Prime Minister Jean Castex said that he would prevent shopping stores from selling “non-essential” products from today to protect small shop owners, who were forced to close the doors of their stores.
Spain, in turn, imposed a night curfew, while almost all of its regions imposed a closure of regional borders to prevent movement for long distances.
The Italian government announced new restrictions yesterday, at a time when the Minister of Health is calling for a nationwide lockdown.