Probably not many people waking up next Sunday 21 March will be aware that it is the International Day of Forests — but they should be.Continue reading
Among developed countries investors, there are various interpretations of the strength of the commitment to environmental, social and governance (ESG) factors in emerging markets, ranging from the cynical to the idealistic.
The cynical view would be that there can be no “real” ESG in emerging markets because too often they are plagued by corruption, therefore investors cannot trust what companies in these countries report.
The idealistic view, on the other hand, would see every little step towards introducing ESG as a wonderful sign that these countries are finally deciding to adopt the same values as Western democracies.
While both extremes are wrong, sadly even the moderate take misses the main difference between emerging markets and developed ones: the effect of development itself on ESG — and in particular on the “E”.
There has been a marked change in sentiment towards emerging markets this year, with more investors getting back in after disappointing performance last year.
But three analysts published warnings about the asset class on Monday. While not calling for an abrupt end to the rises in emerging markets stocks and bonds witnessed over the past few months, the warnings serve as a reminder that volatility can come back at any time.
Capitulation in emerging markets is getting close, a survey of fund managers with $653 billion assets under management suggests.
Emerging markets have quickly caught the developed nations’ disease and now many of them suffer from too rapid credit growth, which threatens their financial stability, analysts at Societe Generale said in a report.
In several countries, credit growth has exceeded 15 percent per year over the past four years, outpacing gross domestic product growth.
Asian manufacturing data show that the recovery is gaining strength, with most figures rising.
China’s HSBC final Purchasing Managers’ Index (PMI) showed the strongest improvement in operating conditions in seven months, rising to 50.9 in October from September’s 50.2, data from Markit showed on Friday.