Entries filed under 'Emerging Markets'

    Emerging Markets: Reading the Tea Leaves on China's Currency Moves

    August 14, 2015 1:18 PM by Leah G. Traub, Ph.D.

    China first devalues—then supports—its currency.  What exactly is going on?

    After two days of depreciating its currency, the yuan (or “renminbi”), and effectively sending global currency markets into turmoil, China’s policymakers apparently decided late Wednesday (August 12, Shanghai trading time) that the currency had fallen far enough, at least for now.  

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    El Nino: The Agricultural Sector Prepares for Impact

    July 30, 2015 2:50 PM by Lord Abbett Editorial Staff

    After a five-year absence, the El Niño weather phenomenon is back, and it may have far-reaching effects on the world’s agriculture markets.

    For some investors, events in Greece and China may take a backseat to another, more natural phenomenon: the warming of the ocean waters in the central and eastern tropical Pacific Ocean, an event better known as El Niño. As unpredictable as the weather can be, when an El Niño occurs, the location of some of that year’s biggest weather anomalies can be predicted with a higher degree of certainty than would normally occur during a year without an El Niño. And that’s important information for everyone involved in the agribusiness, including those who invest in it.

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    Rare Century Bonds Return to Emerging Markets

    June 9, 2015 10:15 AM by Jerald M. Lanzotti, CFA

    Mexico and now Brazil's Petrobras have both issued 100-year bonds. What is the appeal for the issuer and buyer?

    Would you wait 100 years to get your money back from an investment? Although it is rare, governments and companies sometimes issue bonds that exceed the life expectancy of the average person. In the United States, companies like Coca Cola and Disney and top colleges like the University of Pennsylvania have all planned for a century of anticipated needs with 100-year bond issues.

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    Should Investors Be Wary of Emerging-Market Corporate Debt?

    June 3, 2015 4:50 PM by Jerald M. Lanzotti, CFA

    A strong U.S. dollar and a few high-profile defaults have some EM investors on edge. But we don’t think they present significant problems for the market.  

    Relatively few emerging-market (EM) companies issue hard-currency bonds (that is, bonds issued in other than a local currency). Although a rapidly growing asset class—and, at roughly $1.6 trillion, one rivaling the size of the U.S. high yield bond market—the EM hard-currency bond market is still roughly one-third the size of the local currency debt sector and represents a small percentage of EM gross domestic product (GDP), a little over 8% in Latin America and less than 3% GDP in Asia, according to the Financial Times.

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    Is This a Window of Opportunity for Emerging-Market Currencies?

    May 22, 2015 10:40 AM by Leah G. Traub, Ph.D.

    The European Central Bank’s continuing commitment to quantitative easing eventually will boost the economies of emerging markets and support their currencies.

    With the European Central Bank’s (ECB) ongoing commitment to quantitative easing, we do not expect much more euro appreciation versus the U.S. dollar.  But a window of opportunity for emerging-market (EM) currencies versus the euro may be  on the horizon. And the recent support for EM currencies versus the U.S dollar remains in play, at least for the short term.

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