After almost a year of selling emerging markets, investors seem to be returning in force. The latest to turn positive on the asset class is asset and wealth manager Pictet Group (AUM: 265 billion pounds) which said on Tuesday its asset management division (clarifies division of Pictet) was starting to build positions on emerging equities and local currency debt. It has an overweight position on the latter for the first time since it went underweight last July.
Local emerging debt has been out of favour with investors because of how volatile currencies have been since last May, For an investor who is funding an emerging market investments from dollars or euros, a fast-falling rand can wipe out any gains he makes on a South African bond. But the rand and its peers such as the Turkish lira, Indian rupee, Indonesian rupiah and Brazilan real — at the forefront of last year’s selloff – have stabilised from the lows hit in recent months. According to Pictet Asset Management:
LONDON (Reuters) – From Greece to Ecuador to Pakistan, countries that not long ago saddled bondholders with multi-billion dollar defaults, are set to re-enter global markets, cashing in on investors’ desperate need for higher-yielding assets.
With debt yields in the euro zone at multi-year lows and 30-year U.S. Treasuries offering less than 3.6 percent, investors are again scrambling for higher-return assets – a hunger that such pariah credits, are well placed to satisfy.
LONDON, April 7 (Reuters) – Russian stocks tumbled more than
1 percent on Monday and the rouble slipped on worries over
renewed tensions with Ukraine while broader emerging equities
and currencies also eased, tracking moves on global markets.
Pro-Russian protesters seized official buildings in several
eastern Ukrainian cities on the weekend, including the mining
city of Donetsk. They demanded a referendum on whether to join
Russia like that held in Crimea that paved the way for its
annexation by Russia.
LONDON, April 4 (Reuters) – Investors are starting to move
back in to emerging stocks and bonds after a long hiatus, data
from fund tracker EPFR shows, but the economic slowdown gripping
the developing world is likely to constrain market rallies.
Emerging stock and bond funds saw their first weekly inflows
after more than $50 billion fled in the first three months of
2014, with equities snapping a 22-week losing streak,
Boston-based EPFR Global said.
LONDON, April 4 (Reuters) – The Turkish lira slumped half a
percent on Friday, moving off recent three-month highs as
comments from the prime minister renewed fears of political
interference, leading a general emerging market retreat before
U.S. jobs data.
Investors were waiting for the March U.S. non-farm payrolls
later in the day to see if the world’s biggest economy is
finally regaining momentum after an extreme winter. A robust
jobs report could prompt the Federal Reserve to step up the pace
of stimulus withdrawal – broadly seen as a negative for emerging
LONDON, April 4 (Reuters) – Emerging market stock and bond
funds saw their first inflows over the past week after over $50
billion fled in the first three months of 2014, with equities
snapping a 22-week losing streak, data from EPFR Global shows.
The Boston-based fund tracker, which tracks funds with $23
trillion in assets, released details of first quarter flows late
on Thursday, showing that all emerging equity fund categories
had shed $41 billion, following $26.7 billion losses in 2013.
The West has just agreed to stump up a load of cash for Ukraine but there is a distinct sense of deja vu around it all.
Let’s face it – Ukraine’s track record on how it manages ts economy and foreign affairs isn’t great. This is the third aid programme Kiev has signed with the International Monetary Fund in a decade and two of them have failed. The IMF has its fingers crossed that this one will not go the way of the past two. Reza Moghadam, the IMF’s top European official, tells Reuters in an interview:
LONDON, April 1 (Reuters) – Investors are starting to look
afresh at emerging equities after years in which the sector has
been a consensus “sell”.
Barclays, Citi, HSBC, Morgan Stanley and Societe Generale
are among banks now advising clients to buy back in – albeit
selectively – after a prolonged sell-off that has slashed
LONDON, March 31 (Reuters) – Emerging market borrowers
raised just over $100 billion worth of debt in the first quarter
of 2014, slightly below year-ago levels as geopolitical noise
and uncertainty over U.S. Federal Reserve plans dampened
Emerging sovereign and corporate issuers launched $106.2
billion in hard currency bonds between Jan. 1 and March 27, data
compiled by Thomson Reuters shows, well below the $124.5 billion
that was launched in the first quarter of 2013.
It’s a brave investor who will venture into emerging markets these days, let alone start a new fund. Data from Thomson Reuters company Lipper shows declining appetite for new emerging market funds – while almost 200 emerging debt and equity funds were launched in Europe back in 2011, the tally so far this year is just 10.
But Shaw Wagener, a portfolio manager at U.S. investor American Funds has gone against the trend, launching an emerging growth and income fund earlier this month.