Emerging debt and reform - a closer look at Argentina and Brazil

Both countries seeing improving sentiment

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Sabina Raza of Barclays Investment Solutions
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Sabina Raza of Barclays Investment Solutions

Emerging debt markets have often suffered from weak institutions and lack of political and economic reforms, writes Sabina Raza, multi-manager at Barclays Investment Solutions.

However, many recent regime changes have seen successfully implemented reforms, including increasingly independent central banks and judiciaries, and significantly lower borrowing costs in both external and local markets. While India, Indonesia and Mexico have all adopted their own measures, Argentina and Brazil are two countries in the midst of significant ongoing reforms. Currently, they account for close to 7% of the hard currency emerging bond market. Brazil alone is 10% of the JP Morgan GBI-EM Global Diversified Index and Argentina, which came into the index at the end of Februar...

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