The Path to 2020
Back in 2013, we jumped in our time machine and leapt to the year 2020. Free from themarket noise of the first taper tantrum, we looked back at the subsequent evolution of the emerging markets (EM) predominantly focusing on EM corporates that were (and still are) catching investors’ attention. We laid out a scenario in which EM corporates, supported by continuous expansion of EM economies, populations and investor knowledge, would become, not without obstacles and market gyrations, a core component of the global corporate fixed income market. By 2020, most investors would look at them on a global sector/industry basis rather than along specific product or regional lines.
Seven years was a significant time horizon in a market that was and still is focused on the near term. Markets and credit spreads are more often driven by geopolitical issues, general fear and psychology, rather than by the underlying fundamentals.
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