INSUBCONTINENT EXCLUSIVE:
disappointment.
The Singapore-based strategist at Societe Generale, one of the few to anticipate the slump in emerging markets beginning in
January, sees no imminent turnaround for the asset class
economist Carmen Reinhart warning of additional risks for emerging markets, even after eight consecutive weeks of inflows into the asset
They point to a gloomier growth outlook amid an escalating trade war, the prospect of further dollar strength as well as pockets of
fragility in China, Brazil and India.
That would compound the pain from an already tumultuous 2018 in which emerging-market equities slid
into a bear market and every major currency in the developing world declined against the dollar.
Some combination of Chinese stimulus, an
end to the US-China trade war, a pause in Fed tightening due to inflation and higher oil prices could help spur a rebound within the asset
be the primary source of pain.
Waiting out the FedDaw said the time to dive in to emerging-market assets would be when the Fed starts to cut
The South American country is also looking more attractive to Chua.
The Societe Generale strategist also recommends shorting the Brazilian
Domestically, Chinese authorities must juggle the need for stimulus with the desire to rein in runaway home prices
to Kathy Jones, chief fixed-income strategist at Charles Schwab Co in New York
She expects the US dollar to remain firm near term while additional Fed tightening, slowing Chinese growth and lower commodity prices also
