Feature – Emerging markets


EMERGING MARKETS: A PERFECT STORM


After the stampede to unload their Russia investments follow- ing the invasion of Ukraine, it is a moot point whether institu- tional investors should take this a step further by reconsidering their exposure to other emerging markets.


Underperformance relative to some developed markets is being compounded by the big losses reported by Chinese builders last year, particularly Evergrande, and the unclear out- look of technology companies. All of these are being exacerbated


50 | portfolio institutional | May 2022 | issue 113


by the war in Ukraine, creating a perfect storm which is hitting emerging markets hard. Evergrande’s default late last year is a big case in point. A lack of disclosure by China’s second largest property developer by revenue and rumours it had missed an interest payment made investors nervous and so they speedily fled the scene. This investor flight was justified when Ever- grande made the staggering announcement in March that it would not be filing audited annual results.


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