EMTA Forum in Frankfurt - June 12 2014
EMTA FORUM IN FRANKFURT
Thursday, June 12, 2014
Hosted by
Le Meridien
Wiesenhüttenplatz 28-38,
Frankfurt am Main, Germany
Topics will include:
- What events could trigger another rally or sell off in EM debt?
- What strategies are likely to deliver alpha in EM debt?
- Could Turkey and Russia lose investment grade status?
- Is the Ukraine crisis a side show or will it derail the European economy?
- Will elections in India and Indonesia lead to positive economic change?
- Will demand for EM corporates remain strong?
- Are markets overly sanguine on prospects for the Chinese economy?
3:30 p.m. Registration
4:00 p.m. Panel Discussion
Prospects for the Emerging Markets
Christian Keller (Barclays) – Moderator
Andreas Hahner (Allianz Global Investors)
Peter Schottmüller (DEKA Investment)
Nicolas Schlotthauer (Deutsche Asset & Wealth Management)
Peter Attard Montalto (Nomura)
5:00 p.m. Cocktail Reception
Additional support provided by Barclays and Nomura.
Registration fee for EMTA Members: US$75 / US$695 for non-members.
EMTA’s First Frankfurt Forum Focuses on EM Opportunities
“EM has been much more resilient than we had expected, and there have been great opportunities if one caught them at the right moment,” summarized Christian Keller of Barclays in his opening remarks at EMTA’s first Forum in Frankfurt. The event was held on Thursday, June 12, 2014 and was sponsored by MarketAxess, with Barclays and Nomura providing additional support. Approximately 50 EM market participants attended.
Keller served as panel moderator and asked speakers if they remained optimistic on, or were concerned about, EM debt prospects for the second half of 2014. Allianz Global Investors’ Andreas Hahner reasoned that “there are some bad stories in EM, some very good stories, and some opportunities.” Hahner cited EZ stabilization, better-than-expected US economic performance and slower-than-expected Fed tapering as supportive of EM assets. Nicolas Schlotthauer (Deutsche Asset & Wealth Management) expected a short-term technical rebound in local markets, following increased concern by crossover accounts over Brazilian, Turkish, South African and Russian local debt.
Peter Attard Montalto (Nomura) acknowledged he wasn’t “super bearish,” and also saw crossover flows back into EM debt. In addition, the increased ability of Japanese pensions to make foreign investments represented a major development for the next decade. DEKA’s Peter Schottmuller believed crossover money was returning to EM and “chasing whatever assets that have been left behind.”
On the market’s high yielders, Attard Montalto expressed his underlying concerns over Ukraine, while noting strong IMF commitment to the country. Hahner cited “huge implementation risk” over the IMF package, with it becoming more difficult in November. “Economic data could worsen,” he warned.
Hahner expressed caution on Argentine debt and expected further uncertainty about the resolution of debt repayment and the attached volatility and risk to bond investors. Schlotthauer responded that the recent Paris Club accord at least showed some movement; “you don’t find that in Venezuela.”
Keller noted the marketplace’s recent adoption of a more relaxed view on China. He asked if it was fair to view China as “a black box, but with its leaders seeming to be in control of the economy?” Schlotthauer believed that “further structural reforms in all areas are needed to keep the country on track.” Schottmuller cautioned that China could be “Subprime II, its déjà vu for me,” while adding that “the only difference is that, in China, the government owns all the banks. If you believe in the Chinese approach, you have to conclude that the best solution to the financial crisis would have been to nationalize the European and US-banking sector,” he asserted.
The panel also addressed inflation concerns, the internationalization of the renminbi, the reduced possibility of sanctions against Russia, credit downgrades, and favorite trade recommendations.