Which was the best performer in emerging bond markets last year? The sector had a pretty torrid year overall, with sovereign dollar bonds finishing 2013 almost 7 percent in the red. But there were exceptions.
The best returns were to be had – hold your breath — in little-watched Belize, a member of JPMorgan’s NEXGEM frontier debt index. Someone who bought Belize debt at the start of last year would have been in the money, with gains of 50 percent, though the returns were in fact down to the restructuring of Belize debt early last year.
LONDON, Jan 9 (Reuters) – A two-year rally in frontier
African stocks, which has withstood the Nairobi shopping mall
attack, violence in the Central African Republic and fighting in
South Sudan, is showing signs of fatigue, pointing to muted
gains this year.
The MSCI Africa index, which excludes South
Africa but includes three North African markets, has risen more
than 60 percent over the past two years as investors sought
plays on the rising purchasing power of middle class consumers
in the world’s fastest-growing continent.
Former Goldman Sachs economist Jim O’Neill, deviser of the BRIC acronym uniting the emerging market giants of Brazil, Russia, India and China, has coined a new term – MINT.
In a series of BBC radio programmes starting today, O’Neill looks at the “next economic giants” of Mexico, Indonesia, Nigeria and Turkey. It’s a break-out of four of the countries from his previously-coined Next-11, which also included Bangladesh, Egypt, Iran, Pakistan, Philippines, South Korea and Vietnam.
Last year was not the best for mergers in emerging markets, according to Thomson Reuters data, which shows mergers & acquisition activity down 4.6 percent from 2012 to $675.2 billion. The number of deals fell even more – by 11.3 percent to 12,748.
The drop-off in emerging M&A activity mirrors a 5 percent fall in the benchmark MSCI emerging stocks index last year, with investors more fearful about the emerging market growth outlook. But unlike stock market performance, emerging market deal activity outstripped the global total, which was down 6 percent from 2012 levels.
LONDON, Dec 30 (Reuters) – Time for an end of year quiz.
Which emerging and frontier market countries were the best stock
performers in dollar terms?
Nil points if you said China, with its colossal internal
market, recession-free Poland, or oil-rich Nigeria.
LONDON, Dec 24 (Reuters) – Emerging market dollar bond sales
hit record highs of $450 billion this year, surprising industry
players who had predicted issuance to suffer from the threat of
U.S. monetary stimulus withdrawal.
Worries about the squeezing of the U.S. lifeline that had
fuelled demand for risky assets drove money from emerging market
debt funds and hit returns in 2013, after several years of
inflows and double-digit gains.
LONDON, Dec 19 (Reuters) – Elections in all the “fragile
five” emerging economies next year, along with the thorny topics
of Syria and Iran, will make life tricky for investors trying to
steer through political risks in developing markets after a
The withdrawal of U.S. monetary stimulus will set the
backdrop for the year, particularly for these big developing
economies that depend heavily on foreign investor inflows.
LONDON, Dec 18 (Reuters) – Ukraine’s dollar debt soared on
Wednesday, a day after the country agreed a bailout from Russia,
while Turkish stocks fell more than two percent to their lowest
level in more than three months following a corruption probe.
Russia said on Tuesday it would buy $15 billion in Ukrainian
bonds under a deal that keeps Kiev firmly in Moscow’s orbit and
out of the European Union’s grasp, but sowed doubts in some
Ukrainians’ minds about what President Viktor Yanukovich might
have agreed to in secret.
LONDON, Dec 17 (Reuters) – Emerging stocks edged up on
Tuesday ahead of a U.S. Federal Reserve meeting which may decide
on a withdrawal of monetary stimulus, though Turkish stocks fell
following high-profile detentions as part of an investigation
into alleged bribery.
The Federal Open Market Committee starts a two-day policy
meeting on Tuesday and investors are on tenterhooks over when it
will begin to reduce its $85 billion-a-month bond-buying
programme, a major driver of risky assets.
LONDON (Reuters) – Cajoled by developed world governments and shocked by disasters such as the Bangladesh factory fire, investors in emerging market companies are looking more closely at environmental, social or governance issues before they buy.
Once the preserve of religious and ethically minded funds and the development finance arms of major economies, these ESG themes have moved into the mainstream.