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Geopolitical tensions, including the Russia-Ukraine war and the Israel-Hamas conflict, are reshaping markets, with the IMF warning of a potential decline in global growth by 2025. Gold has emerged as a safe-haven asset, while oil prices stabilize amid supply concerns. Australian stocks like GrainCorp and DroneShield show varied performance, with analysts maintaining positive outlooks despite recent challenges.
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Cocoa prices have surged over 40% since a low in October, leaving chocolatiers who anticipated lower costs in a difficult position. Those who depleted their stockpiles now face high prices to rebuild, while others lacking adequate hedges are exposed to increased market risks, with coverage reduced to about five and a half months.
Switzerland celebrated new carbon offset rules established at COP29 in Baku, which aim to restore trust in carbon markets amid concerns over greenwashing. The country, heavily reliant on offsets, is now positioned to define its agreements under Article 6.4, crucial for meeting its climate goals. However, critics warn of potential transparency issues and the risk of double counting in the offsetting process.
Junk bonds in emerging markets are experiencing a significant rally, with a Bloomberg index indicating a 15% surge this year, the largest since 2016. Countries like Argentina, Sri Lanka, and Ghana are being rewarded for their economic reforms and recovery from defaults. However, this rally may be a temporary phase before potential new distress as 'Trumponomics' unfolds.
Dr. Ernest Addison, Governor of the Bank of Ghana, highlighted the threats climate change poses to the country's financial stability, particularly through disruptions to infrastructure and agriculture that could lead to increased non-performing loans. He emphasized the need for banks to prioritize sustainability and enhance cybersecurity measures amid the rapid digital transformation in the sector. Collaboration between banking institutions and the Central Bank is essential to address ethical issues and improve credit risk assessments.
Emkay Global Financial has maintained a BUY rating for Varun Beverages, setting a target price of Rs 750. The company has acquired a 100% stake in SBCT/SBCG, enhancing its presence in Tanzania and Ghana, which are key markets for non-alcoholic beverages. This strategic move is expected to boost VBL's revenue by 9-10% and improve earnings through scale leverage, with the Tanzanian acquisition valued attractively at 1.2x EV/sales.
The Bank of Ghana's Governor, Dr. Ernest Addison, asserts that a resilient banking industry foundation has been established, bolstered by measures to address emerging risks like technological disruptions and climate vulnerabilities. Despite improvements in asset growth and capital adequacy, challenges such as rising non-performing loans and financial fraud persist, necessitating stronger internal controls and ethical practices. Industry leaders emphasize the need for collaboration and ongoing education to navigate the evolving financial landscape effectively.
Varun Beverages Limited has acquired full ownership of SBC Tanzania and SBC Beverages Ghana for INR 13,040 Mn and INR 1,270 Mn, respectively, enhancing its presence in Africa. Following these acquisitions, the EPS estimate for CY26E has been raised by 4.0% to INR 13.4, leading to an upgraded target price of INR 770 while maintaining a "BUY" rating. The strategic expansions are expected to contribute approximately 5.0% to EBITDA and 4.0% to EPS growth in CY26E.
Ghana"s financial authorities are reviewing restrictions on pension fund investments in offshore assets. The National Pensions Regulatory Authority had previously mandated that pension funds obtain authorization for foreign asset purchases to safeguard foreign exchange, a measure introduced amid the country"s debt restructuring efforts.
A €350 million program aimed at assisting vulnerable nations with climate disaster costs has only disbursed €5.2 million in two years. Launched at the 2022 UN climate talks, the Global Shield has faced delays, with only Ghana receiving funding for drought insurance, raising concerns about developed nations" commitment to climate finance.

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