Emerging perspectives

Emerging Market Debt Indicator November 2021

Find out what Chile’s first-round presidential election result means for investors, and – as always – read about recent developments across the EM sovereign debt universe and our outlook.

6 Dec 2021

18 minutes

EMD Team

This edition includes:

  • Market background
  • Top-down views and outlook for the asset class
  • Insights from the team:
    Chilean politics and beyond: key considerations for investors
    Hear from our expert on Latin America, Nicolas Jaquier, on what Chile’s first-round presidential election result means for investors, and read Nicolas’ summary of the fiscal, monetary and ESG dynamics in the country.
  • Regional highlights
    Read our EM debt team’s overview of November’s market developments across the EM sovereign debt universe.

Download the PDF

The fast view

Market background
It was a weaker month for EM fixed income and currency markets. Rising inflation pushed up US Treasury yields before they reversed course after news broke of the Omicron COVID variant, with similar sharp shifts happening across financial markets.

Egypt responded to concerns over further dollar bond issuance by securing external funding, including US$3 billion in bank loans to fund ESG projects. In Kenya, tourism has been slowly improving, remittances are at record levels, and the economy has rebounded strongly as lockdowns have eased.

Most of the region continues to embrace a ‘living with the virus’ approach to COVID-19, but China, Hong Kong and Taiwan continue to adopt a zero-tolerance approach. Inflation has risen slightly in the region but remains relatively benign. High vaccination rates have lifted Singapore’s growth outlook.

Latin America
Central banks in the region continue to react to inflation, but it may be close to peaking in some countries. Investors welcomed election results in Chile and Argentina, but the appointment of a relatively unknown candidate as central bank governor in Mexico weighed on sentiment.

Central and Eastern Europe
Poland, Hungary and the Czech Republic all aggressively hiked interest rates during the month. Poland’s national bank surprised the market with a bigger-than-expected rate rise, leading to a sell-off in the country’s local currency bonds.

Rest of Europe, Middle East and Africa (EMEA)
The Turkish central bank announced a further interest rate cut, causing the lira to sell off. Elsewhere, tensions between Russia and neighbouring Ukraine intensified during the month, and Omicron variant news weighed on South African assets.

Specific risks
Emerging market: These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.

General risks
The value of investments, and any income generated from them, can fall as well as rise. Costs and charges will reduce the current and future value of investments. Where charges are taken from capital, this may constrain future growth.
Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations.
Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made.
Environmental, social or governance related risk events or factors, if they occur, could cause a negative impact on the value of investments.

Authored by

EMD Team

Important Information

This communication is provided for general information only should not be construed as advice.

All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

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