Emerging-market debt not losing its allure, including in SA, says Morgan Stanley
‘Real interest rates in the US are rising, undermining the real interest-rate premium that emerging markets have over the US’
Singapore — Not all emerging-market debt is losing its allure as US treasury yields rise. At least not for Morgan Stanley Investment Management’s Michael Kushma. Far from taking a more sceptical view of the asset class, Kushma, who helps oversee $80bn in debt, says the trick is to seek securities in places where there is relatively low interest-rate risk. It’s a strategy that leads him to talk enthusiastically of countries that many of his peers might say are too perilous to consider. Egypt and Ukraine for example. And he has SA on his radar too. "Real interest rates in the US are rising, undermining, a bit, the real interest-rate premium that emerging markets have over the US," Kushma, the firm’s chief investment officer for global fixed income, said in an interview in Singapore. "The gap is closing a bit, but it’s not like the gap’s gone away. The gap is still meaningful, so we still think emerging markets will do fine." While reducing exposure to government bonds and taking on mo...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.