DISTRICT LINE-A Rundown from the World Bank/IMF meetings

viernes 7 de octubre de 2016 20:00 GYT

By Paul Kilby and Davide Scigliuzzo

WASHINGTON, Oct 7 (IFR) - Beyond the negative headlines over European banks, Brexit and a slumping British pound, investors at the World Bank/IMF meetings remain upbeat about the prospects for emerging markets.

And while EM countries have problems of their own, the buyside is more than happy to take bets on the asset class at a time when low growth in the developed world keeps rates low.

Aside from positive technicals brought on by accommodative monetary policies, fundamentals are also improving in EM after a period slow or negative growth.

The Fund recently revised its GDP forecast for emerging and developing countries up to 4.2% for the year, even as it lowered its outlook for advanced economies to 1.6%.

"EM growth is getting better at the margin and a lot of current accounts have moved into positive territory," Pierre-Yves Bareau, global head of EM debt at JP Morgan Asset Management, told IFR on the sidelines of the meetings.

"The difference between EM and developed market growth is growing again."

The turnaround in emerging markets is arguably most pronounced in Latin America, particularly on the political front as new leaders in Argentina, Peru and Brazil maintain or tighten the reins on fiscal consolidation.

"I like Latin America which has lagged on the debt side," said Bareau. "It is the only region left where you have positive political catalyst."   Continuación...