It’s election year for major emerging
market economies from India to Brazil. And political risk falls at a
time when investors are assessing just what an unwinding of US monetary
stimulus means for the developing world. The so-called ‘Fragile Five’ –
India, Indonesia, Brazil, South Africa and Turkey – all hold elections
in the months ahead, with corruption just one theme expected to be
feature highly.
There has been a notable shift in market concerns about emerging
markets over the past month or so,” said our researchers. “While the May
to August 2013 phase of the sell-off was dominated by fears about
balance of payments weaknesses, the current phase is about a broader set
of risks, in particular growth, the credibility of the policy-making
regime and the political climate in general.”
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