Nothing is broken in emerging market debt which cannot be fixed. However, the repairs may take some time, says Rob Hall, institutional fixed income portfolio manager at MFS Investment Management.
We have seen a lot of smoke billowing around emerging market debt this year, as falling emerging market currencies have grabbed headlines. If there is a fire behind all this smoke, what kind of fire it is? As of a month ago, hard currency emerging market sovereign bonds had made slight gains year-to-date in dollar terms, and had declined slightly in sterling. Hard currency corporate bonds had posted modestly positive gains, in both dollar and sterling terms. Local currency sovereign debt had fared worse: while basically flat in local currency terms (which points to the relative stab...
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