You are here: Home » Markets » News
Business Standard

More investors turning sour on emerging markets, says HSBC survey

More than one in four investors feel 'bearish' about emerging markets, an HSBC survey showed, as slowing economic growth and the spectre of tighter monetary policy in US clouds the outlook

Topics
Investors | HSBC

Reuters  |  LONDON 

Market participants say investors are moving money from small-caps due to concerns about expensive valuations and the impact of regulatory tightening.

LONDON (Reuters) - More than one in four feel 'bearish' about emerging markets, an survey showed on Wednesday, as slowing economic growth and the spectre of tighter monetary policy in the United States clouds the outlook.

In July fewer than one in 10 surveyed were bearish, while the proportion of feeling bullish has dropped to 27% from 40%, said.

have ramped up their expectations for interest rate hikes from the Federal Reserve and other central banks next year to keep a lid on inflation. The investors surveyed said tighter policy in developed economies was the single biggest risk to the outlook for emerging

"The global economy has faced a series of negative supply-side shocks that are causing downside risks to growth and upside risks to inflation," said Murat Ulgen, Global Head of EM Research at

"Emerging are a lot more susceptible to these shocks, hence their financial markets have markedly underperformed those of developed markets, and it seems like this 'stagflationary' backdrop is still keeping EM investors at bay."

Emerging market assets have fared badly in 2021, with equities underperforming and many currencies suffering big falls. Foreign investors have been dumping local currency bonds.

Emerging market equities are now trading at their deepest discount to developed markets since 2004, and the low valuation of some assets could tempt investors to dive back in, HSBC's Ulgen noted.

Still, the latest survey showed 37% of investors expect emerging market growth to accelerate over the next 12 months, down from 60% in July.

Investors are downbeat on emerging currencies, on Asian hard and local currency debt and emerging equities, while they like central and eastern european assets, the survey report showed.

The survey canvassed 120 investors from 115 institutions representing $572 billion in assets under management between Sept. 28 and Nov. 17.

 

(Reporting by Tommy Reggiori Wilkes; Editing by Kim Coghill)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, November 24 2021. 15:50 IST
RECOMMENDED FOR YOU
.