Emerging-market elections could cause ‘bouts of volatility’, including in SA
Moscow — Investors set to bag the best returns in five years from emerging-market bonds this year should brace themselves for 2018. Political risk looms large. Countries that make up more than 50% of a Bloomberg Barclays developing-nation local bond index are gearing up for elections in the next 12 months. While the outcomes of votes in countries such as Russia are predictable, tight contests in heavyweights such as Brazil and Mexico have the potential to cause bouts of volatility. These may catch some investors off-guard after they piled into emerging-market assets this year in search of higher returns as yields in developed markets grind ever lower. "Investors are definitely beginning to think about this stuff, but I suspect they aren’t prepared," said Kieran Curtis, a money manager at Aberdeen Standard Investments in London. "Brazil’s election isn’t until the end of the year, but it’s still somewhere that asset managers are holding quite a lot of risk." Here are details of some o...
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