Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

POLEN-WIG INDEX

SummaryChartsNews 
SummaryMost relevantAll NewsOther languages

Graphic - Emerging markets eye record year as Q3 keeps rally alive

09/29/2017 | 08:57am EDT

LONDON (Reuters) - Having enjoyed a blisteringly hot summer quarter, emerging markets are heading for one of their best years on record - as long as the dollar and global borrowing costs do not rise much further before the end of 2017.

Emerging equities have returned almost 25 percent year-to-date to be this year's top-performing asset class. They are up almost 7 percent this quarter, despite a slight reversal in the last week caused by an upswing in the dollar and U.S. yields.

http://reut.rs/2sxO66c

Within that, stocks in Brazil <.BVSP> and Russia <.MCX> were among the best-performing emerging markets in the past three months, with gains of 21 percent and 14 percent respectively.

http://reut.rs/2yIUZT6

For the first nine months of 2017, Polish <.WIG20> and Chinese equities were leading the pack.

Maarten-Jan Bakkum, emerging markets strategist at NN Investment Partners, noted that emerging markets had in recent months easily digested tensions between the United States and North Korea, signs of a Chinese slowdown and the Fed's hawkish signals.

"The capital flows to emerging markets have not been reversed by these three developments. Indeed, interest rates in the emerging world have continued to fall and emerging equity markets continue to perform well," Bakkum said.

"The main explanation for this is the improving outlook for economic growth in most emerging countries."

Emerging currencies have also rallied strongly in 2017 - JPMorgan's ELMI Plus currency index is up 9 percent this year and 1.6 percent in the July-September quarter <.JPMELMIPUSD>.

The Chilean peso <CLP=> and Brazilian real <BRL=> rose the most, strengthening around 4 percent in the third quarter against the greenback: http://reut.rs/2yIUZTf.

Bonds denominated in emerging currencies are also among the winners of 2017, gaining 13.7 percent year to date, while hard-currency sovereign debt is up 8.4 percent: http://reut.rs/2yIEztQ.

Average local-currency bond yields measured by JP Morgan's index <.JGEGDCM> are now less than a percentage point away from record lows hit in 2012.

But the rally has further to go, many reckon, despite a looming U.S. interest rate rise, because inflation-adjusted yields in the sector are high enough to compensate for risks.

"Emerging market (local-currency) yields have dropped below 6 percent, but even if the nominal yield has dropped, real yields are still attractive versus the real yield in developed markets," said Paul Greer, senior emerging debt trader at Fidelity International in London.

But there have also been stragglers in the third quarter.

Greek stocks <.ATF> fell around 16 percent on concerns over the health of the banking sector, while Qatar's index <.QSI> suffered further losses against a backdrop of tensions between Doha and other Gulf Arab states.

The Argentine peso <ARS=> and South African rand <ZAR=> slipped by over 5 percent and 3 percent against the dollar during the third quarter.

The rand has had a choppy year because of political uncertainty and mixed signals on the economy ahead of the ruling ANC party's December leadership contest.

(Reporting by Alexander Winning, Marc Jones and Sujata Rao; Editing by Keith Weir)

By Alexander Winning and Marc Jones


© Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
BEST INC. -1.94% 1.01 Delayed Quote.-49.51%
EURO / ARGENTINE PESO (EUR/ARS) 0.11% 114.7691 Delayed Quote.11.61%
EURO / BRAZILIAN REAL (EUR/BRL) 2.66% 6.188 Delayed Quote.-5.00%
S&P QATAR LARGEMIDCAP INDEX NTR 0.00% 332.77 Delayed Quote.5.41%
WIG INDEX (PLN) -0.56% 67485.84 Real-time Quote.18.18%
All news about POLEN-WIG INDEX
2020Polish e-commerce company Allegro lights up Europe's IPO market
RE
2020Polish e-commerce company Allegro lights up Europe's IPO market
RE
2020Poland's Play could sell some of its network infrastructure - source
RE
2020Polish games operator's IPO a success as stay-at home lockdown boosts outlook
RE
2019Global growth jitters take toll on EM shares, FX muted
RE
2018Poland's Energa appoints new CEO
RE
2018Poland's CEO carousel makes investors' heads spin
RE
2018Polish insurer PZU raises 2020 return on equity target
RE
2017Graphic - Emerging markets eye record year as Q3 keeps rally alive
RE
2016Assets rebound, jitters over British vote linger
RE
More news
Chart POLEN-WIG INDEX
Duration : Period :
POLEN-WIG Index Technical Analysis Chart | MarketScreener
Full-screen chart