What are the risks to emerging market debt?

clock • 2 min read

There are attractive investment opportunities among high-yielding emerging market (EM) eurobonds in our view, writes Koon Chow, an EM macro and FX strategist at Union Bancaire Privée (UBP).

However, EM bond prices fell in November; attributable to some investor neglect of improving EM credit fundamentals and misunderstanding of the impact of a Trump presidency. Investors seem to be anticipating a Trump presidency as helpful for the US economy (with tax cuts, de-regulation, and higher infrastructure spending) and as detrimental for EM because of expected faster Federal Reserve hikes and higher treasury yields. We have a different view for the following reasons, however.  Take spread cushion in EM. Historically when US treasury yields have increased, EM eurobond yields ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Emerging markets

Four Graphs explaining India

Four Graphs explaining India

Four experts write

Investment Week
clock 12 February 2024 • 4 min read
JEMI's Omar Negyal: Emerging markets are well positioned to support AI boom

JEMI's Omar Negyal: Emerging markets are well positioned to support AI boom

Early adaption is key

Omar Negyal
clock 11 January 2024 • 2 min read
TSMC and Infosys most frequent top ten holdings across JP Morgan AM trust stable

TSMC and Infosys most frequent top ten holdings across JP Morgan AM trust stable

Emerging markets dominate

James Baxter-Derrington
clock 10 January 2024 • 1 min read
Trustpilot