In Russia, the average debt of companies in the MSCI index fell to $8.9 billion in the second quarter from $10.3 billion a year earlier as international sanctions prevented many from issuing new debt. Oil and gas giant Rosneft PJSC alone chopped $8.6 billion of obligations.

The debt-reduction push is one of the reasons emerging-market stocks have soared this year, led by the 63 percent surge in Brazil’s benchmark index in dollars. India’s S&P BSE Sensex index reached a one-year high on Wednesday after climbing 8.9 percent this year.


“Lots of emerging markets are undergoing deleveraging,” said Standard Life’s Curtis, who helps manage $80 billion of fixed-income. “Russia is the most dramatic. The government has plenty of liquidity available form other sources and has made that liquidity available to help companies deleverage. Brazil too has been deleveraging.”

Not everything is rosy. South Africa’s markets are in turmoil amid reports Finance Minister Pravin Gordhan could face arrest as he battles with President Jacob Zuma over the management of state-owned companies. Mongolia is close to economic meltdown after commodity prices slumped and its spending got of hand.

In Venezuela, the opposition has called for a protest march on Thursday as it tries to push the government into holding a referendum to recall its wildly unpopular president this year. With stores empty, inflation in the triple digits and shortages of everything from staple foods to life-saving medicines, Venezuela is the most likely country in the world to default, according to credit-default swaps traders.

Yet in most of the developing world, companies are benefiting from a much-improved economic outlook.

Fueled by a combination of fiscal stimulus and monetary easing, China’s economy -- the second-largest in the world -- grew 6.94 percent in July, on track to reach its 6.5 percent target for 2016, according to the Bloomberg Monthly GDP tracking model.

Russia is forecast by analysts to exit its worst recession in two decades later this year as it benefits from the 21 percent surge in the price of oil in 2016.

Meanwhile, Brazilian President Michel Temer is helping restore investor and business confidence in Latin America’s biggest economy after two years of recession and political tumult. Analysts now expect Brazil to emerge from its deepest slump in more than a century next year, even after the second-quarter contraction was worse than forecast. Recent reports have shown that companies are optimistic about the future for the first time since 2014 and the high inflation that has plagued the country over the past few years is finally showing signs of slowing.

Temer became Brazil’s official president on Wednesday after senators voted to impeach Dilma Rousseff, a resolution to the political crisis that’s likely to be welcomed by investors.