PA Portfolio: Are there any bright spots left in emerging markets?

Nancy Curtin, CIO, Close Brothers AM During the past few years, many emerging economies have witnessed a perfect storm of events, clouding their near-term outlook. Growth has slowed, commodity prices have weakened, wages have risen and declining productivity levels have caused returns on capital to decline. Earnings and cashflow for many companies are under pressure. Meanwhile, the ‘fragile five' (Indonesia, India, Brazil, South Africa and Turkey) have seen their currencies decline by close to 15% on average over the past year. These countries also have large current account deficits (...