EM corporates: Identifying opportunities in a stressed price environment

Where should investors look?

With nearly half the world’s population in lockdown, global demand and supply chains have been severely impacted by the coronavirus pandemic.

Global economic deterioration has been slowed by extraordinary fiscal and monetary policies put in place by governments and central banks around the world. For example, the US has implemented a $2trn stimulus package to help consumers and impacted industries navigate this crisis. Similar measures have been implemented in other developed and emerging markets (EM) and we believe EM companies are relatively well positioned to weather this downturn. EM corporate bond valuations have cheapened dramatically amid broader volatility in global risk markets. The CEMBI spread widened by about...