Investors of the markets of countries with developing economy (emerging markets, EM) nothing to fear repeat panic of 2013, which was attributable to the increased profitability of US government bonds amid hawkish statements by Federal reserve officials, analysts say JPMorgan Asset Management.
Drop EM bond indices in national currencies and dollars on Friday was the highest since may last year, while the rise in yields on 10-year US Treasuries to multi-year highs triggered a sell-off in the stock markets of the world. Although the fed intends to continue raising interest rates, this time the US is not the only country whose economy is gaining momentum, Bloomberg reported.
“The synchronous nature of the global economic growth is always very favorable for emerging markets, says Diana Amoah from JPMorgan. We expected it, and accordingly have positioned our portfolios. We see this as a normal revaluation of the yields of the United States” .
“From a fundamental point of view, if you look at the growth in the US, the base rate was too low to be observed in the economy of the situation. The current dynamics are highly correlated with economic growth. And when the U.S. economy is gaining momentum, as a rule, everybody wins, especially emerging markets,” she said.
D. Amoah said JPMorgan AM looking for markets experiencing is similar to the U.S. cycle, such as Central and Eastern Europe.
“We continue to prefer countries with high real rates without inflationary pressure in South Africa and Russia remain our favourites,” she said.