The tendency for global capital to flee ‘risky’ Emerging Markets (EM) countries indiscriminately in favour of ‘risk free’ developed markets during outbreaks of global risk aversion is one of the great international market failures of our time. This behaviour has been ubiquitous in past crises and the 2020 Coronavirus Crisis is no exception. EM countries have experienced indiscriminate outflows, regardless of their policies or fundamentals. Fortunately, today most established EM countries have local markets, so their vulnerability to outflows is significantly reduced. However, the least developed EM countries remain completely exposed, lending weight to the argument that new global macro-prudential policy tools are imperative.
Dr Jan Dehn, Global Head of Research and member of the Investment Committee, joined Ashmore in 2005. As a global strategist and economist, with vast experience in international macroeconomic issues, Jan is responsible for making key calls on markets and economies at a global level. His expertise spans developed and Emerging Markets with particular emphasis on the international linkages between economics, finance and politics. At Ashmore, Jan has traded developed and Emerging Markets, including sovereign external debt, local currency bonds, FX, corporate bonds, and Frontier Markets.
Earlier in his career, Jan was a strategist at Credit Suisse First Boston in New York and London. He has also worked as a consultant at the World Bank in Washington DC undertaking research on public finance and commodity issues, and has been an economic adviser to a number of Emerging Markets governments.
Jan holds a Doctorate in Economics from Oxford University, a Master’s Degree in Quantitative Economics from Warwick University, and a Bachelor’s Degree in Economics from Sussex University. He has lived on three continents and travelled to more than 140 countries. He is also a fully qualified wooden shipwright.
It cannot have escaped investors’ attention that stock markets are surging and spreads are tightening. Yet, the world has not looked as bad as this in political and economic terms for a very long time. Asset prices seem divorced from fundamental realities. How and why does this happen and what does it mean for investment? This short note aims to provide a brief perspective on these questions.
Jun 9, 2020
Chinese bonds tend to perform better than other EM local currency bonds during bouts of risk aversion, making them – perhaps in spite of, not despite, fears over the spread of coronavirus – a de facto safe haven, argues Ashmore's EM bond guru Jan Dehn.
Mar 5, 2020
Global growth is decelerating. Policy-makers in developed economies are gearing up for yet more fiscal spending. While fiscal spending may support growth for a short time, and for longer if very carefully applied, it will not change the growth outlook fundamentally. This is because the main reason for slower growth lies elsewhere, namely in gross misallocation of capital on a global scale,…
Jan 10, 2020
With the volume of negative-yielding developed market assets shooting past the USD15tn mark, inflation globally on the wane and downside risks for the Dollar rising, returns for EM fixed income investors are looking to be as strong as ever, argue Ashmore's Jan Dehn and Gustavo Medeiros.
Oct 31, 2019