South Africa:
The company waited until there was “more clear-cut political change” in the country. It reversed estimates on some of the negative fundamental dynamics that were hurting the economy, including the current account. “We became much more positive that the inflation rate was peaking, but we’re worried on the currency”
Indonesia:
MSIM’s favorite in Asia is Indonesian sovereign bonds; they have reasonably high yields, the central bank is committed to currency stability and there’s an attractive economic backdrop, as credit upgrades show
“If you look at the universe of EM as a whole, stronger economic growth usually comes with stronger commodity prices, which lead to a better balance of payments, stronger currencies, lower inflation, lower interest rates and easier central bank policies,” Kushma said. “There’s no reason to expect it to do badly. But it’s coming under more duress from higher real interest rates in the U.S.”
This article was provided by Bloomberg News.