Emerging perspectives

Emerging Market Debt Indicator July 2021

In this edition, we discuss the new paradigm in China and what it means for bond investors. As always, we also highlight recent regional developments and share our outlook for the EM debt universe.

Aug 9, 2021

21 minutes

EMD Team
In this edition, we discuss the new paradigm in China and what it means for bond investors. As always, we also highlight recent regional developments and share our outlook for the EM debt universe.

This edition includes:

  • Market background
  • Top-down views and outlook
  • Insights from the team
    • A new paradigm in China and what it means for bond investors.
      Portfolio Manager Alan Siow discusses key considerations that could help investors navigate the increasing news flow from China.
  • Regional highlights
    • Our EM Debt experts summarise July’s market developments across the EM sovereign debt universe.

Download the PDF

The fast view

Market Background

  • In a more subdued month, the JP Morgan EMBI rose by 0.4%, while the ongoing strength of the US dollar relative to EMFX weighed on the JP Morgan GBI-EM (overall index return: -0.4%).
  • US Treasury yields continued their decline, and concerns persisted around the economic impact of the spread of the Delta COVID variant.


  • Egypt’s fiscal data continues to be strong, with the government achieving a 1.4% primary surplus in FY20/21.
  • In Zambia, the trade balance remained in significant surplus as high copper prices continued to support exports. Foreign capital inflows into the local bond market, combined with expectations of higher reserves after the IMF SDR allocation, boosted FX.


  • PMI data across the region moderated from the previous month, and the COVID situation is weighing on some economies, particularly in ASEAN countries.
  • China’s activity data generally beat expectations, and GDP growth was in line with expectations. An unexpected cut in the reserve requirement ratio (RRR) signalled a loosening of monetary policy. But regulatory tightening in the tech, education and property sectors created some turmoil in markets.

Latin America

  • The COVID picture is generally improving, with cases falling rapidly, particularly in Brazil and Colombia.
  • The busy political agenda had mixed results. In the primary elections in Chile, the more moderate candidates from both the left and right wing parties won. But Peru’s political landscape is increasingly uncertain and complex.

Central and Eastern Europe (CEE)

  • Leading indicators continue to point to robust growth across the region as economies progress out of their respective COVID restrictions.
  • Poland and Hungary both made headlines over legal disputes with the EU.

Rest of Europe, Middle East and Africa (EMEA)

  • We continue to see monetary policy tightening across the region in general, with Ukraine, Russia and Kazakhstan raising interest rates.
  • On COVID, the Delta variant continues to drive case growth, particularly in Russia, Kazakhstan, and Turkey.


Authored by

EMD Team

Important Information

The information may discuss general market activity or industry trends and is not intended to be relied upon as a forecast, research or investment advice. The economic and market views presented herein reflect Ninety One’s judgment as at the date shown and are subject to change without notice. There is no guarantee that views and opinions expressed will be correct and may not reflect those of Ninety One as a whole, different views may be expressed based on different investment objectives. Although we believe any information obtained from external sources to be reliable, we have not independently verified it, and we cannot guarantee its accuracy or completeness. Ninety One’s internal data may not be audited. Ninety One does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

This communication is provided for general information only and is not an invitation to make an investment nor does it constitute an offer for sale. Investment involves risks. This is not a recommendation to buy, sell or hold a particular security. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. The securities or investment products mentioned in this document may not have been registered in any jurisdiction.

In Hong Kong, this communication is issued by Ninety One Hong Kong Limited and has not been reviewed by the Securities and Futures Commission (SFC).

Except as otherwise authorised, this information may not be shown, copied, transmitted, or otherwise given to any third party without Ninety One’s prior written consent. © 2021 Ninety One. All rights reserved.

Past performance figures shown are not indicative of future performance. Investors are reminded that investment involves risk. Investors should refer to the offering documents for details, including risk factors. This website has not been reviewed by the SFC. 

By clicking on the hyperlink of Investor relations below, you are leaving this website with information specific for retail investors in Hong Kong and entering the global website.

Please note that the global website is not intended to target Hong Kong investors. It has not been reviewed by the Hong Kong Securities and Futures Commission (“SFC”). The website may contain information on funds and other investments products that are not authorised by the SFC and therefore are not available to retail investors in Hong Kong. The website may also contain information on investment services / strategies that are purported to be carried out by a Ninety One group company outside of Hong Kong.

Any product documents and information contained in this website are for reference only and for those persons or entities in any jurisdictions or country where the information and use thereof is not contrary to local law or regulation.

Issuer: Ninety One Hong Kong Limited
Email: [email protected] 
Telephone: (852) 2861 6888 
Fax: (852) 2861 6861