Insights
More issuers line up to tap strong EM debt market

August 23, 2019 — In this Q&A, the Eaton Vance floating-rate loan team offers its perspective on today’s loan market.

By: Craig P. Russ; Andrew Sveen, CFA; Ralph Hinckley, CFA; Christopher Remington

Read Full Paper


Latest


Monthly Market Monitor

Monthly Market Monitor

Concise economic and asset class data in clear, impactful charts.

Download

Filter All Insights

Use the form below to filter insights by Topic Category or Content Type.

Topic Category

Content Type

Affiliate

Filter Insights by Date:     or  Show recent results
The article below is presented as a single post. Click here to view all posts.

All Articles ()

There are currently no articles for this filter

By Emerging Markets Debt TeamEaton Vance Management

Boston: The emerging-market (EM) debt sector in 2019 remains on a roll. Ongoing demand from investors has helped produce strong performance, reflected in year-to-date total returns through May 31 of 7.65% for sovereign debt, 6.49% for corporate and 3.04% for local currency.* EM debt gross issuance, in just sovereign and corporate hard currency issues, stands at $281 billion through May 31, compared with $521 billion for all of 2018, according to J.P. Morgan.

With demand still strong, a number of EM countries are lining up for planned new issuance before the summer is in full swing, including Eastern European countries Serbia, Croatia, Lithuania and Ukraine, as well as Ecuador.

EM is benefiting from several tail winds, including:

  • An improving macro backdrop. The U.S. Federal Reserve has moderated its tone and is now likely to be on hold this year. China has just announced a stronger-than-expected burst of fiscal stimulus as part of efforts to manage its growth slowdown. We also think the Trump administration, in the lead up to the 2020 elections, is likely to focus more on domestic issues, easing back on its hard-edged international stance that in 2018 included sanctions against Russia and intense political pressure on Turkey.

  • Country fundamentals. Issuers in the developing world are now showing slight improvements at the margin following a few years in which they have been stable or deteriorating overall.

  • Investor flows and interest in EM debt have been improving. As of May 31, more than $37 billion had come into the asset class, according to J.P. Morgan estimates.

Bottom line: Renewed flare-ups in trade wars and/or slower global growth remain potential threats to EM debt performance. We believe that intensive country analysis, combined with a focus on currency, rates and credit valuation, is the best way to capitalize on exposure to EM debt and minimize its risks.

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Eaton Vance disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Eaton Vance are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance strategy. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness.