Global growth concerns are likely to keep EM on its back foot. China and the eurozone reported weak economic data Friday, and even a much stronger than expected US retail sales report was not enough to turn market sentiment.
The legendary EM investor spoke to Bonds & Loans about his new brainchild, Mobius Capital Partners - an ESG-focussed EM asset management company, and explained why when it comes to investing in sustainable finance market corporates, bigger isn't always better.
Turkey’s credit fundamentals are deteriorating, squeezed by high exposure of the corporates to USD debt and rising NPLs. Strong and transparent policy measures – including supporting local banks if necessary – are needed to breath life into the economy, Novruz Bashirov, Portfolio Manager at Rimrock Capital, told Bonds & Loans.
EM FX caught a bid last week as markets took Fed comments to be on the dovish side. Given how firm the US data have been of late, we do not agree with the newly prevailing view that the Fed will be more cautious. However, we must respect the price action and so this dollar correction will likely extend until the market’s Fed view reverses again.
19 Nov 2018
EM FX ended last week on a firm note but the week was still a bad one. We think risk-off impulses will continue and likely intensify in the coming weeks. As such, we remain negative on EM as an asset class. China will provide its first glimpse of October with PMI readings, while US jobs report Friday will be the data highlight of the week.
Bonds & Loans team spent some time on the ground in Colombia to meet with a broad range of local finance leaders in order to get a sense of the risks and opportunities on the horizon in the Andean country.
Jan Dehn, Head of Research at Ashmore, explains why there are two conditions that have to be satisfied before currency volatility can morph into major economic malaise.
In the exclusive new Bonds & Loans podcast we chat to Brad Tank, CIO of Neuberger Berman, on the aftermath of the biggest financial crisis the world faced in the past 30 years - and where the global markets are ten years on.
We saw a significant EM positioning washout last week, with weak longs getting punished. Anyone lulled into jumping aboard the EM train recently is getting crushed by sharply higher US rates. ARS and BRL bucked the trend and gained last week, but all others were weaker and were led by ZAR, CLP, and COP. MSCI fell 4.5%, while EM bond yields surged. With US rates still marching higher, EM is likely to remain under pressure this week.
Franklin Templeton’s Senior Research Analyst Franck Nowak concedes that some optimism has faded over the past quarter, especially as Fed hikes look inevitable and EM jitters have settled in, but underscores the fact that GCC bonds are performing still well and project finance is expected to drive the deal pipeline for the region in 2018.
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11 Dec 2018