Emerging Markets a Mess, Need a 'Country by Country' Look

The rout in global commodities prices has claimed a number of formerly high-flying developing economies — and their asset markets — as victims. Despite the widespread carnage, there are still some regions that may be relatively attractive to investors.

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How Some Emerging-Market Investors Actually Made Money

In a rough year for emerging markets, some of the most treacherous trades are paying off.  Bonds issued by Latin American oil companies, Ukrainian banks and Chinese real-estate developers are among the best-performing assets in developing economies in 2015.  Fund managers who snapped up these battered bonds—and other assets deemed risky even by the standards of emerging-market investors—are delivering positive returns while benchmarks languish in negative territory.

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China Rate Cut Lifts Emerging Markets

Most emerging-market stocks rose as China’s surprise interest-rate cut added momentum to a four-week rally in riskier assets. The zloty weakened and Polish banking stocks fell after the opposition party looked poised for an election victory.  The Shanghai Composite Index climbed 0.5 percent in the first trading day after China lowered borrowing costs for the sixth time in a year and reduced lenders’ reserve requirements. 

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A Good Acronym for Emerging Markets Needs a V

Rarely has there ever been an acronym more fortunate than the BRIC group. Starting in 2001, when Jim O'Neil from Goldman Sachs synthesized Brazil, Russia, India and China, followed later by South Africa, the term began appearing in economics publications and everyday language. Soon it became synonymous with emerging markets, a relentlessly growing web that threatened to undermine the industrial world's primacy.

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Will Last Week's Relief Rally In Emerging Markets Last?

Stocks in emerging markets posted their best weekly gain in nearly four years last week. Analysts are divided over whether this is a dead-cat bounce or the start of an enduring mean-reversion trade in the wake of nearly non-stop declines since last April. From the perspective of the week just passed, however, there's no doubt that equity markets in so-called emerging countries enjoyed a powerful rally for the five days of trading through Oct. 9.

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New Emerging-Market Woes

One of the last havens in emerging markets is showing signs of strain.  Companies in emerging markets issued trillions of dollars of foreign-currency bonds during the decade long commodity boom, and took advantage of low interest rates in the developed world following the 2008 financial crisis. Now, many investors fear the commodity bust will lead to a rise in defaults that could deepen economic slumps in many of these nations.  Until a few months ago, emerging-market corporate bonds were regarded as a haven amid the routs that had hit stocks and currencies in many developing countries because the bonds are typically issued in the U.S. dollar and by companies with robust growth and credit profiles.

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Turmoil in Emerging Markets Tests Resilience of US and Europe

The most important question confronting investors is whether the United States and Europe will remain insulated from the economic turmoil that is now sweeping through the emerging markets.  Janet Yellen, who chairs the US Federal Reserve, is confident that the prospects for the world's largest economy "appear solid", clearing the way for an interest rate rise by the end of the year.In a speech last Thursday, Dr Yellen acknowledged that the Fed was keeping a close eye on what she described as "developments abroad", before adding that that "we do not currently anticipate that the effects of these recent developments on the US economy will prove to be large enough to have a significant effect on the path for policy".

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Smarter Way to Play an Emerging Market Rebound

Emerging market funds – targeting shares in fast-growing Asian and South American countries – have delivered losses averaging 12pc over the past three years.  Much of the damage occurred in recent months as anxiety about the strength of economic growth rocked the markets. An upward move in US interest rates – which did not materialise last week, but will eventually arrive – is expected to knock these regions further.  Heavy commodity price falls, which have also depressed emerging market currencies, show no sign of reversing.

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Bargains in Emerging Markets Can Be Risky

As emerging markets reel from their worst selloff in years, some investors are picking through the ruins, convinced that the massive slide in stocks and bonds has uncovered rare opportunities to buy on the cheap.  Their shopping list includes Mexican bonds, Philippine banks and Chinese Internet companies. The key, they say, is to be selective—while bargains abound, many believe that emerging markets remain fraught with peril.

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China and Emerging Markets Capital Crisis That Wasn’t

New figures from China’s central bank point to large, but not crippling, outflows  The end-of-summer meltdown in emerging markets, when the MSCI stock benchmark collapsed by 9% in August, created a bigger fear than just stock losses—chiefly that emerging countries are experiencing crippling capital outflows.

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