A survey of market sentiment for emerging markets shows investors bearish over the short term for the first time since June last year. The survey, carried out by Societe Generale among 84 clients in Asia, Europe and the US in February, showed 39.3 percent of clients were bearish for the 2-week horizon, versus 38.1 percent bullish.
The decline in fixed income yields and the 17.34 percent rise in the Nigerian Stock Exchange (NSE) year-to-date may tempt pension fund administrators (PFAs) back into equities, analysts say.
Emerging market currencies are likely to sell off sharply when the Federal Reserve stops buying bonds and the dollar starts to rally, a strategist has warned. Speculation about when the Fed will stop its quantitative easing programme has been increasing, with many analysts predicting that this may be closer than expected as US economic growth normalises.
There was robust demand for emerging markets fixed income securities as Investors bought Hungary’s bond issue, the largest global emerging markets bond so far this year, a 5 and 10 year dollar deal that amounted to $3.25 billion.
Investors seeking strong returns in the current low-growth environment should consider less mature markets such as Nigerian and Bangladesh, say managers of UK-based BlackRock Frontiers Investment Trust, a member of the global investment management company, BlackRock.
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