HSBC Global Viewpoint Perspectives: Emerging Markets – new dynamics
Jul 23, 2025
Polina Kurdyavko, Head of BlueBay Emerging Markets, shares her expertise in navigating the complexities of emerging market investments. She highlights the unique risks and opportunities investors should consider. The discussion covers the impact of oil price volatility on different regions, contrasting Argentina’s promising outlook with Venezuela’s decline. Kurdyavko also delves into investment strategies that address market volatility and the importance of central bank policies, offering insights for those looking to diversify their portfolios in these dynamic markets.
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BRICS Impact on Capital Flows
- A 1% reallocation from US markets could equate to 20-30% inflows in individual BRICS economies due to their smaller size.
- Wealth network inflows provide strong technical support for BRICS markets currently.
Choosing Between EM Hard and Local Debt
- Local currency EM debt offers higher returns but comes with more volatility than hard currency debt.
- Most investors currently start with hard currency debt; local currency could outperform next year with supportive growth.
Fiscal Strength Defines Winners
- Fiscal and political discipline dictate EM winners; Latin America is split between fiscally prudent and challenged countries.
- Asia is generally fiscally stronger and positioned to support growth through rate cuts.