JOHANNESBURG/NAIROBI: International bonds issued by smaller, riskier, emerging economies suffered another sharp selloff on Wednesday after President Donald Trump’s eye-watering 104 percent tariffs on China took effect, re-igniting turmoil across global markets.
Pakistan’s longer-dated dollar-denominated bonds tumbled more than 6 cents to be bid below the 70-cent threshold where debt is seen as distressed, Tradeweb data showed.
Longer-dated bonds, issued by Sri Lanka, Nigeria and Egypt, were all down between 3.5-4.5 cents, although trading was thin, according to market participants.
Debt in smaller emerging markets, known as frontier markets, has suffered sharp selloffs since Trump announced a raft of sweeping tariffs last Wednesday, with many bonds in the asset class losing 10 cents or more over the past week.
The latest rout is boosting the cost of borrowing for those economies, with many of the bonds seeing their yields in the double digits, a threshold that makes it unpalatable for them to tap international capital markets.
“There are some concerns in the market that Frontiers will find it more difficult in the future to raise external funding due to the external market developments and possibly persistent loss in risk appetite,” said Gergely Urmossy, senior frontier markets strategist at Societe Generale.
This could lead to more currency weakness in those economies over the medium term and curtail the space for central banks to lower interest rates to shore up their economies, he added.
Many frontier market governments, especially African sovereigns, had only recently returned to Eurobond markets.
They had lost access for some two years when the fallout from COVID-19 and Russia’s
full-scale invasion of Ukraine sent inflation sharply higher and fueled a global interest rate-hiking cycle that priced those governments out, and helped push Ghana and Zambia into default.
Razia Khan, head of research, Africa and the Middle East at Standard Chartered, said the latest set of tariffs had fueled more concerns over global growth.
“Frontier markets, especially at the lower end of the ratings spectrum, are seen as more vulnerable when risk-off sentiment grips markets,” she said.

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday reiterated his administration’s desire for closer collaboration with the United States in trade, investment and counterterrorism during a meeting with a visiting American delegation attending the Pakistan Minerals Investment Forum in Islamabad.
The US and Pakistan have had a complex relationship, ranging from close defense cooperation during the Cold War, particularly after the Soviet invasion of Afghanistan in 1979, to more strained and uneven ties in recent decades.
Despite challenges, Islamabad has sought to broaden and deepen relations with Washington. However, its ambition to pivot to an export-driven economy by expanding global trade took a hit when President Donald Trump imposed a 29 percent tariff on Pakistani goods last week.
Still, the visiting US delegation, led by Eric Meyer, Acting Assistant Secretary at the Bureau of South and Central Asian Affairs, praised Pakistan for hosting the investment forum and expressed American interest in the country’s mineral sector.
“While underscoring the significance of Pakistan-US relations not only in the bilateral context but also for regional peace and security, the Prime Minister expressed Pakistan’s desire to work with President Trump and his Administration to strengthen bilateral relations with the United States,” Sharif’s office said in a statement after the meeting.
“The Prime Minister underscored the importance of enhanced cooperation in areas of mutual interest including trade and investment, as well as counterterrorism,” it added.
Sharif also encouraged US companies to invest in Pakistan’s minerals sector, calling it a “priority area” with immense potential.
Meyer congratulated Pakistan on organizing the two-day event and acknowledged the interest of American firms in exploring investment opportunities in Pakistan’s mining industry.
Separately, the American official met Interior Minister Mohsin Naqvi and held detailed discussions on bilateral cooperation in counterterrorism, anti-smuggling and narcotics control.
Both sides agreed to enhance collaboration, with Naqvi highlighting that a Pakistan-US Counterterrorism Dialogue scheduled for June in Islamabad would be “an important step in strengthening joint efforts.”
Meyer condemned last month’s deadly terrorist attack on the Jaffer Express, a passenger train targeted in Balochistan province by separatist militants, and offered condolences for the loss of life.
“Pakistan cannot fight this war alone,” Naqvi said. “The international community must support it.”
He noted that, like the US, Pakistan was also grappling with the issue of illegal immigration, referring to the presence of Afghan nationals in the country whom the government is working to repatriate to the neighboring state.
Naqvi also expressed hope the American delegation’s participation in the minerals forum would serve as a milestone in advancing investment and bilateral ties.