While credit ratings have reflected these improving fundamentals, with several upward revisions in the most recent quarter, we expect credit rating adjustments to become more balanced. Emerging-Market Debt Outlook: Mixed Conditions In 2022 Current analysis does not guarantee future results. Investors should note that by making an investment they will own shares in the fund, and not the underlying assets. Neither these securities, nor their offer, sale, or transfer, have been registered with the Superintendence of the Securities Market (before named National Securities Commission). Emerging Market Debt Outlook and Positioning - Vontobel Key Findings from the Fitch Ratings-FinanceAsia 2020 Asia Credit Market Outlook survey. Clean hydrogen: Opportunities beyond the hype, Navigating dark clouds across emerging markets debt, Unearthing opportunities in Asian credit markets, Our approach to integrating Environmental, Social and Governance issues in investing. For the whole of 2020, Eurobond issuance by emerging economy borrowers was some $800 billion, more than a 10 percent increase over 2019. Accordingly, the Interests may not be offered orsold in Peru except, among others, if such offering is considered a private offer under the securitieslaws and regulations of Peru. Source: J.P. Morgan Asset Management; data as of September 2022. Can non-U.S. equities overcome a strong U.S. dollar? United States. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our privacy policies at https://am.jpmorgan.com/global/privacy. Kirstie Spence. Documents relating to this offering (as well as information contained herein) may not be supplied to the general public for purposes of a public offering in Argentina or be used in connection with any offer or subscription for sale to the public in Argentina. Risk factors you should consider before investing: Kirstie Spence is a fixed income portfolio manager at Capital Group. Thorough research and an active approach to investing is key to mitigating risk and finding opportunities in EM, no matter which way the wind blows. Mexico:The fund interest(s) have not been, and will not be, registered with the Mexican National Securities Registry (Registro Nacional de Valores) maintained by the Mexican National Banking Commission, (Comisin Nacional Bancaria y de Valores) or the CNBV and may not be publicly offered or sold in the United Mexican States. Crises like the coronavirus pandemic intensify inequality and poverty, which could fuel public discontent and affect political and policy paths. Both past performance and yields are not a reliable indicator of current and future results. Emerging market hard currency sovereign credit. Crises like the coronavirus pandemic intensify inequality and poverty, which could fuel public discontent and affect political and policy paths. (We agree.) This strong demand is likely to fuel a commodities boom. For emerging-market debt (EMD), 2022 is shaping up to be a contest of conflicting forces. Any referenced benchmark does notreflect fees and expenses associated with the active management of an investment. But another key criteria for strong returnsthat EM economies grow faster than DM economiesno longer holds. Sources: United Nations, Reuters/Refinitiv, Bloomberg, Capital Group calculations, Food makes up a higher proportion of CPI baskets in EM compared to DM countries, As at 31 December 2019. The outlook for China remains key for emerging markets. The credit impulse normally impacts economic activity with a nine month lag, as the chart below shows, suggesting that the Chinese economy will remain weak until the middle of next year. Over the next decade, the global drive toward net-zero carbon emissions will generate a huge increase in demand for copper, aluminum, cobalt and lithiummost of which come from EM countriesto upgrade electric power networks and make batteries. Thats one reason we believe that evaluation of environmental, social and governance (ESG) considerations should be an integral part of the investing process, for both sovereign and corporate EM issuers. Strong global growth satisfies one criteria for strong EMD returns. FAO: Food and Agriculture Organisation of the United Nations. Emerging market debt outlook | abrdn Switzerland:This material is issued byPineBridgeInvestments Switzerland GmbH and classes thiscommunication as a financial promotion which is intended for Institutional and Professional clientsas defined by theSwiss Federal Financial Services Act ("FinSA"). There can be no guaranteethat any of the opinions expressed in this document or any underlying position will be maintained atthe time of this presentation or thereafter. As of December 31, 2021 This is a branch office ofPineBridgeInvestments Ireland Limited, licensed andregulated by the Central Bank of Ireland. Sweden:PineBridgeInvestments Ireland Limited Sweden filial is licensed and regulated byFinansinspektionen. We see the probability of a US recession rising in the second half of 2023, which would likely mean a global recession, although we think the downturn might be mild and resemble 2001 rather than 2009. We prefer Iraq, Nigeria and Ivory Coast over Turkey, Egypt and Kenya. Promocin y oferta de los negocios y servicios de la entidad del mercado de valores del exterior [ofinanciera, segn sea el caso] representada en Colombia. Israel:PineBridgeInvestments is neither licensed nor insured under the Israeli Investment AdviceLaw. Emerging Market Debt Outlook 2021 | Franklin Templeton Ireland:When this document is issued in the EEA, unless stated otherwise, it is approved and issuedbyPineBridgeInvestments Ireland Limited, licensed and regulated by the Central Bank of Ireland. The evidence of easing from manufacturing channels and commodity prices suggests US inflation has already peaked (Exhibit 1). Thesecurities correspond to investment funds that are not investment funds regulated by Uruguayanlaw 16,774 dated 27 September 1996, as amended. As a result, wage growth continues to increase. By comparison, we see Chinese growth accelerating in 2023. As of December 31, 2021 Recognized as one of the Best Places to Work in Money Management by Pensions & Investments for the second consecutive year. With a potential US recession looming, local rates remain our preferred asset class. 2021 Emerging Market Debt Outlook: As China Goes, So Go EMs - PineBridge China is revving up again as the world's growth engine, and the renewed emphasis on infrastructure in its Five-Year Plan and long-term strategy should benefit emerging markets through 2021 and perhaps beyond. And our research shows that about two-thirds of EM corporate bonds that underperformed over the past 10 years did so specifically because of ESG reasons, from catastrophic environmental events to accounting fraud. On the economic front, a very strong recovery is anticipated, with the International Monetary Fund (IMF) forecasting emerging market growth of +6% from an estimated contraction of -3.3% in 2020. Whats more, central bank rate hikes will likely slow EM growth. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In contrast, we remain cautious on local-currency assets over the near term, as these tend to bear the brunt in a sell-off. There is noassurance that any returns can be achieved, that the strategy will be successful or profitable for anyinvestor, or that any industry views will come to pass. Japan:This document is not, and under no circumstances is to be considered as, a public offering ofsecurities in Japan. Emerging Markets Debt Outlook - Invesco - Advisor Perspectives But China no longer sees itself as the worlds growth engine; instead, its broader policy framework prioritizes financial stability and the environment alongside growth. 2022 Midyear Emerging Markets Debt Outlook: Macro and Markets Investors will need to pinpoint pockets of resilience among the many macroeconomic challenges facing the asset class. Thats because the same policy framework that moderates overall growth also lowers the odds of a hard landing down the road. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities. Normalisation of supply chains and base effects should help. The Federal Reserve, Emerging Markets and Private Debt - IMF F&D 36 Tighter financial conditions in the United States and other advanced economies will pressure their own finances and currencies, which could exacerbate inflation and make servicing debt more challenging. For emerging-market debt (EMD), 2022 is shaping up to be a contest of conflicting forces. The information contained in this document isreferential and may not be construed as an offer, invitation or recommendation, nor should be takenas a basis to take (or stop taking) any decision. We estimate that EM countries have completed less than half of their tightening cycle so far, leaving the lions share for 2022. Data from the Institute of International Finance (IIF) showed that small inflows into emerging market debt for the year until end-May were almost all offset by outflows from equities. Facebook Twitter . Diversified portfolio of EMD corporate bonds issued in major currencies. Emerging Market Debt Philosophy BlackRock's Emerging Market Debt (EMD) platform is designed to address the changing landscape of today's EMD markets with a focus on alpha generation. We also expect just transition financingwhich looks to equitably distribute the costs of climate actionto supply large-scale multilateral support to developing nations for many years. On the plus side, monetary space has been created versus developed market peers. While declining returns on assets may be a problem for some smaller rural and city banks, the larger, more systemic institutions are less likely to be impacted. For emerging-market debt (EMD), 2022 is shaping up to be a contest of conflicting forces. Arjun Madan. This was particularly surprising because many emerging economies saw their external financing needs go down due to the recession-induced reduction in their current account deficits. EMs were no different. J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. The result has been a narrowing of the gap between EM and DM growth (Display). Given this mix of obstacles and opportunities, we favor hard-currency sovereign and corporate debt. Strong global growth satisfies one criteria for strong EMD returns. Our preference is to be long dollar, though we see selected relative value opportunities. ~/_site-config/fund-segmentation-disclaimers/fundsegmentationdisclaimers.json, To view PineBridge Insights, please visitour, If you are a member of the press or have a public relations inquiry please view our, View a list of local office addresses and phone numbers on our, To request information or send general feedback, please. The bottom line? We expect to see the renminbi weaken against the dollar in the coming quarter, with the currency moving more gradually within the China Foreign Exchange Trade System (CFETS) basket. Outlook 2022: Emerging Markets - US - Schroders Global growth is slowing (although growth remains abovetrend); parts of EM should see an acceleration in growth in 2022. 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