Hasenstab: No emerging markets bubble in sight

Emerging markets do not face a bubble in the short term as the region shows robust economic fundamentals with little leverage and strong growth, says Michael Hasenstab at Franklin Templeton.

The manager of the $5.91bn (£3.66bn) Templeton Emerging Markets Bond fund says a lot of the fear causing investors to worry about an emerging markets bubble has been based on large inflows into the region. However, Hasenstab says these foreign investment flows are based on robust fundamentals in most of the markets. "Most of the emerging markets have acted responsibly by hiking rates, even when G3 countries are still printing money. They are raising rates, which is bringing in some capital into the debt markets." He adds these countries did not have significant leverage prior to th...