Looking for Good News on Emerging Markets?

Looking for reasons to be cheerful about emerging-markets debt is a tough task at the moment.  Here’s one: strip out repayments, and this year will bring the first negative net debt issuance for emerging markets since 2008. Countries will be paying back more than they issue. All things being equal, scarcity value should offer support. This sounds odd. After all, the first few weeks of this year have brought a splurge of new international bonds from developing countries;  nearly $28 billion worth, in fact, in 14 deals as of Jan. 28, compared with $11.49 billion in 10 deals in the same period of 2013, according to Dealogic data.

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Emerging Markets and Deflation

It is not hard to imagine what that shock might be,” writes the Telegraph columnist, who says the credit bubble in emerging markets has been punctured. “It is already before us as Turkey, India and South Africa all slam on the brakes, forced to defend their currencies as global liquidity drains away. Emerging markets are now half the global economy, so we are in uncharted waters. Roughly $4 trillion of foreign funds swept into emerging markets after the Lehman crisis, much of it by then `momentum money’ late to the party. 

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Central Banks in Emerging Markets Take Action

Following a bout of market turmoil that's weighed on their currencies, central banks in emerging economies are moving fast to contain the damage.  Late Tuesday, Turkey's central bank raised its key interest rate to 12 percent from 7.75 percent to try to stave off inflation and support the national currency, which has fallen sharply in recent weeks.  The decision was taken at an emergency meeting the central bank called for after the currency, the lira, hit a record low.  The People's Bank of China on Tuesday injected more money into the country's financial markets to ease strained credit conditions. India's central bank unexpectedly raised interest rates to prop up its ailing currency.

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Emerging Markets Pray for Wall Street Tumble

What struggling emerging markets need right about now is a big sell-off - in the U.S.  Without a substantial downdraft on Wall Street, the Federal Reserve is highly likely to carry on trimming the amount of bonds it buys every month, continuing at its meeting ending on Wednesday by taking it down another $10 billion to $65 billion.  That tapering will accentuate pressure on emerging markets, which have suffered substantial losses on currencies and securities with investors increasingly less interested in discriminating between the weak and the more stable.

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World Stocks Fall on Emerging Market Woes

Concerns over a sharp fall in emerging market currencies dragged most stock markets lower Friday, as what began as worries over the Chinese economy a day earlier continued to have ripple effects.  A heavy U.S. corporate earnings schedule may influence the tone later in the day, with consumer goods giant Procter & Gamble, tech blue chip Xerox and industrial stalwart Honeywell International all scheduled to issue earnings.

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Emerging Markets to Remain Engines of Global Growth

We had a big debate on emerging markets' growth prospects at our Annual Meetings in October 2013. We lowered our 2013 growth forecast for emerging markets and developing economies by a whopping 0.5 percentage points compared to our earlier forecast. Some argued that we were too pessimistic. Others said that we should have stuck with the lower-growth scenario we had devised at the onset of the global financial crisis.

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Davos Bosses Tread Warily in Emerging Markets

Multinational companies are becoming more picky about emerging market investments as slowing growth in upstart economies and a recovery in the West takes the shine off a previous sure-fire strategic bet. Executives in Davos said they remained committed to tapping into rising middle classes from Shanghai to Lagos, but some are pulling back and redeploying resources in particularly difficult, low-margin regions.

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We're Still Bullish on Emerging Markets

Martin Gilbert, the CEO of Aberdeen Asset Management, has told CNBC he remains bullish on emerging markets in the long term, despite the company seeing large outflows due to a poor performance from the region in 2013.  "I think emerging markets are still growing rapidly, the companies there are still doing well. We had good results from Unilever this week with their emerging markets doing well… I'm bullish on emerging markets long term," he said.
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Emerging Markets Split Into Tortoises and Hares

At over 1,500 meters above sea level, the picturesque setting of Davos inspires those attending the World Economic Forum to take a step back and look at the big picture.  If there has been one common thread that has run through this Swiss Alpine village for the past decade and half, it has been the love affair the corporate world has had with fast-growing emerging markets. One would have been hard pressed to find a chief executive in the halls here who was not bullish on the developing world.

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Emerging Markets Dodge Fed Tapering

Borrowers in developing nations are flooding markets with a record amount of bonds before reductions to Federal Reserve monetary stimulus drive up funding costs.International sales in emerging markets are up 21 percent to $55 billion this month, the busiest start to a year since Bloomberg began tracking the data in 1999. Poland is marketing $2 billion of 2024 bonds today after the European Union’s largest eastern economy raised 2 billion euros ($2.7 billion) last week

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2014 Could Be The Year For African Stocks

With the U.S. markets up 30% in that stellar and historic 2013, the question must be asked: where should smart money go now?  It may be a stretch for such heady gains to be repeated in 2014, as a lot of good news has been baked in to equity prices, especially here in the U.S.  Investors will have to be ready to put their money to work elsewhere for strong returns, and it makes sense to look at emerging markets for continued outperformance.

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Brighter IPO Outlook to Cushion Emerging Markets

From Tunis to Beijing, emerging market companies are gearing up to tap equity investors for capital, potentially grabbing the interest of stock buyers who might otherwise retreat on the ebb tide of cheap U.S. funding. This year is shaping up to be a strong one for new equity issuance in the developing world, defying a disappointing start in broader emerging equities after three years of underperformance. According to Thomson Reuters data, emerging companies have raised $2.3 billion of new equity so far this year, more than five times the amount seen in the same period in 2013.

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Emerging Stocks Advance on Growth Outlook

Emerging-market stocks rose, led by exporters, on speculation that a strengthening global economy will spur demand. Hungary’s forint paced a drop by developing-nation currencies.  The MSCI Emerging Markets Index climbed 0.2 percent to 976.93 as of 10:58 a.m. in London. Largan Precision Co. jumped the most in four months after Deutsche Bank AG recommended buying its shares. The Jakarta Composite Index rallied to a nine-week high as JPMorgan Chase & Co. upgraded Indonesian stocks. Turkey’s lira approached a record low with no developing-nation currencies rising. Hungarian stocks gained for a seventh day as Raba Automotive Holding Plc reached a four-year high.

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Upgrading the Philippine Economy

With much of the developed world hobbling under the burden of massive public debt, The Economist couldn't resist the opportunity to encourage a global, multi-trillion-dollar "new wave of privatizations, this time centered on property." Unsatisfied with earlier waves of privatization, which focused on the banking sector, transport, telecoms, and utilities. It raised the specter of 21st century Thatcherism, where privatization allows governments to"cut their debts and improve their credit ratings," and, in the process, enhance "the economy's efficiency by boosting competition and by applying private-sector capital and skills to newly privatized assets."

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Getting Selective With Emerging Markets

Widely held emerging markets exchange traded funds have done nothing to convince wary investors this year will be better than the last.  The Vanguard FTSE Emerging Markets ETF and the iShares MSCI Emerging Markets ETF, the two largest emerging markets ETFs by assets, are both down more than 3% to start 2014. None of the four major BRIC single-country ETFs have posted gains in 2014. The major BRIC ETFs have been so bad to start the year that the WisdomTree India Earnings ETF is the best of the lot with a 2.2% loss. 

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Ignore Wall Street, Bet on Emerging Markets

Skagen AS, a Norway-based investor that has outperformed funds run by Goldman Sachs Group Inc. and JPMorgan Chase & Co. over the past decade, is telling clients to ignore Wall Street’s biggest banks and buy emerging markets.  Kristoffer Stensrud, the founder of Stavanger-based Skagen who manages the 50 billion-krone ($8 billion) Kon-Tiki A emerging market fund, says a series of elections in the Middle East, Asia and Africa may provide a boost to markets in those regions as lawmakers turn to policies that underpin stability.

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Emerging vs. Developed? What If It’s Not a Competition?

Selling emerging markets and buying into developed ones has been the consensus call since the U.S. Federal Reserve broached the idea it would taper its asset purchases, but what if the two spheres aren't really in opposition?  "The general thesis they have – which most people have – is that there's going to be a strong recovery in the developed markets and as a consequence, particularly because of the Fed tapering action, the emerging markets will tank," said Piyush Gupta, chief executive of DBS Group, at a presentation to private banking clients.
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Where Emerging Markets Are Going This Year

Last year was a tough year for the big four emerging markets.  The MSCI Emerging Markets Index fell 4.36% last year, with India and Brazil underperforming and Russia and China — while also negative — doing a bit better.  Where will these growth markets end up this year?


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Emerging Markets Expected to Drive Device Sales

Consumers in developing countries like Brazil and China are set to continue as the main engine for sales growth for devices like smartphones and tablets in 2014, according to a research report published Tuesday.  In total, worldwide shipments of computers, tablets and smartphones are estimated to rise 7.6 percent this year, to 2.5 billion units, according to the figures from Gartner, the technology research company.  Consumers in developing economies, particularly Asian countries like India and Indonesia, are projected to buy these devices at significantly higher rates than in the United States and Western Europe, Gartner estimates.

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For Emerging Markets, 2013 Couldn’t End Soon Enough

Most emerging-market investors likely want to forget 2013, a year when assets from a broad swath of the developing world were plagued by losses. But some investors are sticking around, hopeful of a modest rebound in 2014.  The year was a bust thanks largely to a massive summer sell-off in emerging market stocks, bonds and currencies, sparked by speculation that the Federal Reserve was looking to reduce the stimulus efforts that had been goosing the global economy for years. While many of those assets managed to recover some losses later in the year, few managed to return to positive territory by the time the calendar turned to 2014.

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Is This The Best Emerging Market For 2014?

Turkey has been one of the more successful emerging markets over the last few years, and investors have seen the market, as represented by iShares Turkey ETF dramatically increase in value since the 2009 financial crisis. This picture reversed rapidly in June, as a public protest over the development of a park escalated to violent rioting, and a sharp sell-off, TUR losing 14% of its value over a couple of trading sessions.

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Emerging Markets May Rebound in 2014

Global liquidity may be adequate for now, but fund managers are likely to take lower than normal risk in their portfolios as five large emerging-market countries India, Brazil, Indonesia, Turkey and South Africa all go to the polls in 2014.Given the uncertainties of a big election year, going bearish on emerging markets may have become the consensus call. But strategists at Bank of America Merrill Lynch expect a modest rebound for emerging markets.Alberto Ades, co-head of global economics at Bank of America Merrill Lynch Global Research, told a conference in New York that emerging market economies' share of world GDP would continue to grow.

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