Morgan Stanley Says There’s Hope for Beaten-Down Emerging Bonds
- Asset managers favor Argentine, South African sovereign debt
- Corporate notes from Brazil pulp companies attractive: MSIM
Photographer: Eric Thayer/Bloomberg
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Robust growth in emerging markets, a less aggressive Federal Reserve, a trade-war detente and attractive valuations will support a rally in developing-nation bonds next year, according to Morgan Stanley Investment Management.
The firm is betting on Argentina’s sovereign local and hard-currency bonds and local debt in Brazil and South Africa. On the corporate side, it favors bonds from Latin America and Asia over developing nations in Europe, which will be dragged down by Turkey. Brazilian pulp, meat and infrastructure companies are particularly attractive, according to money managers Eric Baurmeister and Warren Mar.