Emerging market debt - 2022 outlook Central banks, both in EMs and globally, are tightening policy. 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. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. United States: UnitedHealthcare creates and publishes the Machine-Readable Files on behalf of PineBridge Investments. EM High Yield: J.P. Morgan Emerging Market Bond Index Global Diversified High Yield.US High Yield: Bloomberg US Corporate High Yield Index. Singapore:PineBridgeInvestments Singapore Limited is licensed and regulated by the MonetaryAuthority of Singapore (MAS). The bottom line? Fixed Income. Among the obstacles in this asset class: a negligible difference in the GDP growth of developed markets (DM) and emerging markets (EM . 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. The issuer represents and agrees that it has not offered or sold, and will notoffer or sell, any securities to the public in Uruguay, except in circumstances which do not constitutea public offering or distribution under Uruguayan laws and regulations. Performance Notes: Past performance is not indicative of future results. Goldman Sachs Group Inc. and Bank of America Corp. had . Emerging-Market Debt Outlook: Mixed Conditions in 2022 We estimate that EM countries have completed less than half of their tightening cycle so far, leaving the lions share for 2022. 4 m. In these times of uncertainty and more expensive funding, a pragmatic approach requires cooperation and focus on what really matters. Normalisation of supply chains and base effects should help. We use selection to avoid weaker balance sheet and illiquid bonds. For us, the winners include South Africa, Mexico, Oman, Angola and the UAE. We think the most resilient emerging market economies are those that are both linked to Asia and largely closed for example Brazil, Chile, Indonesia and India. La rentabilidad histrica no garantiza los resultados futuros. EM-DM growth alpha should normalise gradually head- ing into 2023. Colombia:This document does not have the purpose or the effect of initiating, directly or indirectly,the purchase of a product or the rendering of a service byPineBridgeInvestments ("investmentadviser") to Colombian residents. Market review In September 2022, hard-currency emerging market debt 1 returned -6.36%, while local-currency emerging market debt 2 returned -4.87%. And selectivity is key. 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. 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. As economies reopened in 2021, pent-up demand generated strong global growth. This strong demand is likely to fuel a commodities boom. The exemption from registration is based on numeral 3 of Article 129 of Decree Law 1 of July 8, 1999 (Institutional Investors), as amended. US Investment Grade: Bloomberg US Corporate Investment Grade Index. EM inflation elevated, but relatively contained. Higher frequency data reinforces the easing trend in economic activity, Exhibit 1: Baltic Dry and China-Los Angeles Shipping Rate. 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. the three sectors of emerging markets (EM) debt1 hard currency sovereign debt, local currency sovereign debt, and hard currency corporate debt delivered total returns of -4.57%, -4.73%, and -2.64%, respectively. 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. Lazard Asset Management 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. Pre-pandemic, Chinas expansive growth drove commodity prices higher, which in turn helped drive growth in other commodity-rich countries. Source: IIF, IMF, Bloomberg; data as of September 2022. Le dichiarazioni espresse da un singolo individuo rappresentano lopinione di tale persona alla data di pubblicazione e non coincidono necessariamente con le opinioni di Capital Group o delle sue affiliate. Emerging-Market Debt Outlook: Mixed Conditions in 2022 In addition, we want to play peak inflation names and the long end of high- quality investment grade names to protect against recession. We see inflation as less of a directional concern in 2023, although the we expect credit rating adjustments to become more balanced.standard of living debate has now moved fully into focus. Against this backdrop, emerging markets are showing resilience: growth is holding up, and corporate fundamentals are strong. We think sovereign fundamentals are sufficient to manage a mild recession. Portfolio Manager, Emerging Markets Fixed Income. 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. Investors should therefore incorporate ESG factors into the analysis, even if responsible investing isnt top of mind. The managed account services may not be publicly offered or sold in Chile. Recognized as one of the Best Places to Work in Money Management by Pensions & Investments for the second consecutive year. Among the obstacles in this asset class: a negligible difference in the GDP growth of developed markets (DM) and emerging markets (EM) excluding China; persistent inflation; populist pressures; and moderate near-term growth for China. Only then will we improve well-being. In the UK this communication is a financial promotionsolely intended for professional clients as defined in the FCA Handbook and has been approved byPineBridgeInvestments Europe Limited. Case in point: the implications around Omicron remain unclear, but the size and duration of the market response suggests observers dont expect it to have a durable economic or market impact in 2022. Emerging markets (EM) assets had a favorable first quarter likely driven by an improvement in external funding conditions and global central bank moves toward policy accommodation. Investors will need to pinpoint pockets of resilience among the many macroeconomic challenges facing the asset class. Our analysis of US recessions since 1996 suggests that the EM-DM growth alpha could actually be most positive against a backdrop of global recession, which gives us some confidence in emerging market fundamentals. With a potential US recession looming, local rates remain our preferred asset class. However, EM bonds are still lagging developed market (DM) bonds in the pace of recovery, but starting to catch up. Source: Haver Analytics and AllianceBernstein (AB). <iframe src="https://www.googletagmanager.com/ns.html?id=GTM-WQP93QZ" title="nojsGTM" height="0" width="0" style="display:none;visibility:hidden"></iframe> Sign up now to get industry-leading insights and timely articles delivered to your inbox. Some emerging markets will have to weigh monetary adjustment (quantitative tightening) against fiscal restructuring. Investors will need to pinpoint pockets of resilience among the many macroeconomic challenges facing the asset class. Egypt's Post-IMF Pain Is Lesson for Debt-Laden Emerging Markets Investors should therefore incorporate ESG factors into the analysis, even if responsible investing isnt top of mind. The Federal Reserve, Emerging Markets and Private Debt - IMF F&D Fixed Income. 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. Past results are not a guarantee of future results. US labour markets remain extremely tight, with unemployment very low. Outlook on Emerging Markets Outlook October 2022 Summary The stronger US dollar, higher inflation, and tighter financial conditions weighed on emerging markets equities in the third quarter. U.S. Outlook: Expect solid growth, stubborn inflation. Outlook on Emerging Markets | Lazard Asset Management Emerging Market Debt - Institutional | BlackRock In the case of a higher volatility portfolio, the loss on realization or cancellation may be veryhigh (including total loss of investment), as the value of such an investment may fall suddenly andsubstantially. This is a branch office ofPineBridgeInvestments Ireland Limited, licensed andregulated by the Central Bank of Ireland. At any rate, China may no longer need to be the linchpin at the heart of a commodities surge. The securities and any other products or services referenced in this documentmay not be licensed in all jurisdictions, and unless otherwise indicated, no regulator or governmentauthority has reviewed this document or the merits of the products and services referenced herein. The geopolitical landscape remains a morass. 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. Leverage levels are at historical lows, and likely will not get much better form here. Parte de la informacin puede haberse obtenido de terceros, por lo que no se garantiza su fiabilidad. In the second instalment of the Savvy Investor Special Report series, we are pleased to present the Emerging Market Debt edition, including interviews with leading Emerging Market (EM) managers. In Taiwan, this material may not be suitable to investors and isnot reviewed or endorsed by the SFB. We note that ratings have stabilised, with 82% of our issuers on stable or positive outlooks. Emerging markets face bleak outlook after stormy start to the year This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities. Inflation has remained higher and more persistent in EM, compelling most EM central banks to begin tightening monetary policy. Basic balancesthe sum of current account balances and foreign direct investmentare as robust for EM countries as theyve been in 20 years. Emerging market debt - 2022 outlook - RankiaPro Emerging markets have already seen decent portfolio outflows (Exhibit 6), suggesting a degree of tightening has been priced in, while most emerging markets are now looking for inflation to roll over. Strong global growth satisfies one criteria for strong EMD returns. Center for Investment Excellence Podcasts. Global growth is slowing (although growth remains abovetrend); parts of EM should see an acceleration in growth in 2022. Investors will need to pinpoint pockets of resilience among the many macroeconomic challenges facing the asset class. CPI: consumer price index. PineBridgeInvestments and its subsidiaries are not responsible forany unlawful distribution of this document to any third parties, in whole or in part. Emerging market debt outlook | abrdn Businesses that become more sustainable create the most value for investors and for society at large and thats true both for ourselves and for the companies in which we invest on behalf of our clients. Emerging market debt outlook for 2022 | Capital Group In the UK, this material may also be issued byPineBridgeBenson Elliot LLP, registered in England(company number OC317119) with its registered address at 50 Hans Crescent, London, SW1X 0NA. Arjun Madan. FAO: Food and Agriculture Organisation of the United Nations. Coming out of the Fall 2022 IMF meetings, investor reactions were overwhelmingly dominated by US rates and geopolitics. Emerging market debt outlook for 2022 | Capital Group The Interestsdescribed herein have not been and will not be approved by or registered with the PeruvianSuperintendency of Capital Markets (Superintendenciadel Mercado de Valores, or the SMV) or theLima Stock Exchange (Bolsa de Valores de Lima). PineBridgeInvestments is a group of international companies that provides investment advice andmarkets asset management products and services to clients around the world. For the whole of 2020, Eurobond issuance by emerging economy borrowers was some $800 billion, more than a 10 percent increase over 2019. For emerging-market debt (EMD), 2022 is shaping up to be a contest of conflicting forces. This document is provided on aconfidential basis for informational purposes only and may not be reproduced in any form. A Brighter Outlook For Emerging Markets Debt. Emerging markets should continue to grow faster than advanced economies despite the global pandemic, according to Franklin Templeton Fixed Income's Nik Hardingham. Global Corporate Agg: Bloomberg Global Agg Corporate. The spread of the highly contagious Delta variant of Covid-19 across Asia is weighing on emerging-market debt in the region. By receiving this document, each recipient resident in Colombiaacknowledges and agrees that such recipient has contacted the investment adviser at its owninitiative and not as a result of any promotion or publicity by the investment adviser or any of itsrepresentatives. ~/_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. Se facilita con fines nicamente informativos y no constituye un asesoramiento de inversin o una invitacin para adquirir valores u otras inversiones. For example, the recent United Nations Glasgow Climate Change Conference known as COP26 resulted in renewed pledges from developed countries to contribute at least US$100 billion annually to developing nations for transition financing, plus a deal to establish a centralized system for trading carbon offsets, with 5% of the proceeds earmarked for a climate adaptation fund for EM countries. 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 think valuations have a floor, supported by crossover inflows that have been buying price weakness. Diese Informationen sind weder Anlage-, Steuer- oder sonstige Beratung noch eine Aufforderung, irgendein Wertpapier zu kaufen oder zu verkaufen. Thisadvertisement or publication has not been reviewed by the MAS. This document is intendedfor sophisticated/professional investors only and no other Person should act upon it. We note that US gasoline prices have fallen materially beneath the USD 4.30/gallon level, below which the commodity contributes to deflation. Kirstie Spence. Our base case expects economic weakness to be front loaded, while our inflation scenario is the most challenging, Exhibit 2: Simulated Return Analysis Based on Economic Scenarios. This creates a complex backdrop for EMFX more generally. La valeur des investissements et le revenu quils gnrent ne sont pas constants dans le temps, et les investisseurs ne sont pas assurs de rcuprer lintgralit de leur mise initiale. Strong global growth satisfies one criteria for strong EMD returns. In making an investment decision,institutional investors (as defined by Peruvian law) must rely on their own examination of the termsof the offering of the Interests to determine their ability to invest in the Interests. Basic balancesthe sum of current account balances and foreign direct investmentare as robust for EM countries as theyve been in 20 years. IRD*: US Eurozone and Japan real interest rates.a, Emerging market growth alpha is set to normalise. Emerging-Market Debt Outlook: Mixed Conditions in 2022 by Christian DiClementi, Adriaan du Toit of AllianceBernstein, 1/6/22 Leave a Comment For emerging-market debt (EMD), 2022 is shaping up to be a contest of conflicting forces. It bears repeating: In this environment, selectivity is paramount. Thesecurities correspond to investment funds that are not investment funds regulated by Uruguayanlaw 16,774 dated 27 September 1996, as amended. 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. (We agree.) In recent months, investors have been demanding higher returns on bonds . This is not a public offering of securities in Mexico. Emerging Markets Debt Outlook - Invesco - Advisor Perspectives Our inflation scenario, on the other hand, sees US 10-year yields reaching 4%. Accordingly, the offering of any fund interest has not been submitted to the Comisin Nacional de Valores (CNV) for approval. Looking ahead, we are watching elections in Brazil and the National Communist Party Congress in China in October for signs of policy direction. The Interests cannot be offered or sold in Peru or in any otherjurisdiction except in compliance with the securities laws thereof. Time for Action. Taiwan:PineBridgeInvestments Management Taiwan Ltd. Is licensed and regulated by Securitiesand Futures Bureau of Taiwan (SFB). In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals.
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