EM should continue to benefit from the generalized improvement in the global backdrop. Trade tensions have eased whilst the risks of a hard Brexit have fallen, at least for now. Yet recent developments in some major EM countries underscores how important it is for investors to differentiate between the strong credits and the weak ones. For instance, South Africa, Hong Kong, Argentina, and Chile all come with idiosyncratic risks.
Win Thin is the Global Head of Emerging Markets Strategy and has over 25 years of investment experience. He has a broad international background with a special interest in developing markets. Prior to joining BBH in June 2007, he founded Mandalay Advisors, an independent research firm that provided sovereign emerging market analysis to institutional investors. Prior to that, Win was a vice president and international economist, covering major emerging markets in Asia and Latin America for Alliance Capital Management
The Turkish lira continues to tumble. This feels like a rerun of the last lira crisis back in August 2018. Surprisingly little has changed fundamentally in the nearly two years that have passed, as officials have largely refrained from taking any significant actions except those that make it even harder to invest in Turkey. Turkey used to be the darlings of EM. Now, we fear it will end up being…
May 11, 2020
EM assets are coming off a good week, but storm clouds lie ahead. The economic data last week for unequivocally bad, and this week is unlikely to bring much relief. With risk-off sentiment picking up, we expect EM to come under pressure this week.
May 4, 2020
EM came under greater pressure last week as market sentiment soured. Some countries underperformed due to their own idiosyncratic risks, such as Brazil and Mexico. Markets will get their first glimpse of the mainland Chinese economy with official PMI readings, but we doubt continued improvement there will be enough to boost sentiment significantly. Neither will dovish outcomes from BOJ, Fed,…
Apr 27, 2020
EM is coming off a difficult week in which all the economic data underscored just how bad the global outlook has gotten. While risk sentiment ended last week on an upbeat note, we believe EM and other risk assets will have difficulty getting much traction as the data continue to worsen. Oil prices remain under pressure and that is likely to weight on sentiment as well.
Apr 20, 2020