15. July 2016 15:45
This is a ‘sit-up-and-think’ moment for Emerging Market allocators, according to latest Liquidity data. After more than five years of lacklustre EM, investment returns triggered primarily by poor liquidity conditions and correspondingly high risk, the future is looking far, far better. The key reason is the significant recent improvement in both the quantity and, more importantly, the quality of liquidity flows to EM. Not only have both foreign investor net inflows and domestic private sector liquidity jumped higher (virtually across the geographic spectrum of EM), but the currency-sapping dominance of EM Central Bankers has taken a step backwards. Therefore, looking ahead, foreign interest in increasing in what are fast-becoming more healthy, cash-generating economies, with the prospects of greater future currency stability.