On Thursday, NN Investment Partners organised a corporate event at the Cercle Munster in Luxembourg-Grund entitled Emerging Markets opportunities in a low yield environment.
Maarten Jan Bakkum, Senior Emerging Markets Strategist in the Multi-Asset Team, stated that the Emerging Markers slowdown continues, to an average growth rate of 4.2% in 2015. The Chinese demand for raw materials is declining, affecting Emerging Markers terms of trade, and the weakening global trade growth makes an Emerging Markers recovery more difficult. Meanwhile, US monetary policy normalisation is keeping pressure on Emerging Markers capital flows, and a negative Emerging Markers investment climate and the required deleveraging after years of excessive credit growth are the main endogenous factors that limit future growth.
Policy adjustment and reforms remain insufficient which delays the growth trough and increases the likelihood of more currency depreciation. Emerging Markers currencies remain vulnerable due to unwinding USD carry trade, declining commodity prices, high external financing requirements and not cheap REERs. Meanwhile, a disorderly unwinding of the Chinese growth miracle remains the biggest risk.
The main presentation was followed by a Panel Discussion involving Marcin Adamczyk, EMD Local Currency, Roy Scheepe, EMD Hard Currency, and Maarten Jan Bakkum, EM Equities.
Photo (L-R): Roy Scheepe, Maarten Jan Bakkum, Marcin Adamczyk
