Emerging Markets Gaining More Attention

Following a poor performance in December, emerging market (EM) assets look undervalued and could draw investor interest again, analysts say.

“Emerging market assets had a rough month in December and saw outflows of around $8.5 billion,” said HSBC rates strategist Himanshu Malik. “But excess liquidity provided by the Bank of Japan and European Central Bank’s quantitative easing programs has improved sentiment, and investors are returning – although they are being more selective.”

In January, offshore investment into emerging market bonds increased in the majority of EMs, according to a HSBC research note published last Friday. The most notable inflow, of over $1 billion, came from Japan’s retail investors.


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