Changing landscapes

Investing in emerging markets has always been a pursuit best avoided by the faint-hearted. Typically boasting less liquidity than developed markets, and usually backed by less robust and diversified economies, they are renowned for their volatility. As a place to invest or set up a business, many have excessively complex legal and regulatory systems, among other assorted hurdles to doing business, that dissuade any but the specialist from participating. The performance of emerging markets as an asset class during the credit crisis showed that...

In 2009 senior officials at International Finance Corporation in Washington DC decided that the organisation had to be more local. More people needed to be on the ground in the countries IFC works in, rather than trying to solve the world’s problems by sitting in long meetings in the US capital. It was decided that a second headquarters was needed and Istanbul was the chosen city. Centrally positioned, in a country where IFC is actually allowed to work (its mandate prevents it from doing deals in OECD countries), Istanbul has that mix of old...

In 2010 Latin America took center stage as a global growth driver. You could even argue that, amid doubts about the stability of the euro, it took on the status of safe haven. It is no wonder that investors have been piling into the region and looking to acquire increasing quantities of local currency debt. Sovereigns and corporates took notice, and the local currency global bond market revived in 2010. The rise in issuance also revived the old debate about the merits of making local markets Euroclearable. The question had generated...

In the aftermath of the Greek/EU debt crisis explosion, US pension funds have recoiled from peripheral eurozone countries. Most stigmatised have been Portugal, Ireland, Greece and Spain – known as the PIGS. In stark contrast, a deepening American bid for non-eurozone EU nations has continued to develop. Cash rich US funds are anxious to increase their exposure to this space which benefits from favourable fundamentals and relative value versus LatAm sovereigns, as well as US high yield and high grade. The appetite for EEA sovereign paper was...

Argentina has become the new darling of Latin America’s high-beta universe. As investors grow increasingly wary of Venezuela they are instead focusing their attention on the Southern Cone country’s improving story. “Argentina has shown a willingness to pay its debt, amortisations are lower and in the near term we are not looking at a default… as opposed to Venezuela which is falling off a cliff,” said one strategist. Like Argentina a few years ago, worries about a Venezuelan default are on the rise. Strategists still tend to think it an...

Turkey’s banks have been on a funding spree in recent months. Most of the major banks have been active in the syndicated loan arena, where they have traditionally sought most of their foreign funding. Now they are increasingly looking at new markets, with Akbank’s Eurobond and Kuveyt Turk’s sukuk providing evidence that the demand for Turkish paper can be found away from the loan market. Akbank has been the most active Turkish bank in the market, undertaking three international deals each over US$1bn in the past six months. In the process it...

Citigroup, Credit Suisse, JP Morgan, Morgan Stanley, RBC and UBS are among the banks to have launched or built on banking operations in Poland in recent months. This represents a reversal of the withdrawal of many global banks from Poland – and other markets except their home jurisdictions – during the height of the financial crisis. Although it is theoretically relatively simple to set up shop—EU-licensed banks do not need a separate banking license for Poland, as they can set up a Polish subsidiary of their other European operations—it can be...

Violence erupted in the land of the bloodless coup in May this year. “Red shirt” protestors, supporting deposed ex-Prime Minister Thaksin Shinawatra, took to the streets for over a month and clashes with police led to at least 90 deaths in Bangkok. Months later, the political standoff remains in place, but financial markets are thriving. The benchmark stock exchange of Thailand has risen 23.2% from the end of May to September 10. More tellingly, foreign investors, who were net sellers of Bt59.8bn (US$1.94bn) in the second quarter of this year...

The sound of vuvuzelas has passed in South Africa following the world cup, but the country is now buzzing to a different sound: visiting equity capital market bankers rushing around to pitch to potential issuers. Bankers are keen to ensure they are involved in the resurgence in emerging market activity. For years South Africa has been viewed as a market that under delivers, with a flow of issuance well below its potential. The focus has been on emerging Europe, Russia and the Middle East for emerging market ECM bankers in the past five years....