Traders Look Past Ukraine Angst to Load Up on Emerging Assets
- Global monetary tightening is weighing heavier on investors
- Fallout from Ukraine crisis has so far been relatively limited
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Emerging markets are standing firm despite escalating tension along the Ukrainian border, with investors more closely eyeing the impact of major central banks catching up on the global tightening cycle.
From stocks to local currencies, pockets of emerging markets are on the up. Aggressive central banks and high commodity prices are driving advances this year in more than half of the 24 developing-world currencies tracked by Bloomberg. Analysts have sent corporate earnings expectations to an eight-year high. And investor risk appetite is holding strong: South Africa, considered a bellwether for emerging-market risk, is the best performer this month in the local-currency debt market with total returns exceeding 6%.