Six drivers to propel enhanced Emerging Markets sentiment

Despite its resounding rally so far, EM financial asset performance will remain robust in the second half of the year, as the external and local conditions that are supporting the current rally are likely to remain in place, believe analysts at HSBC. Murat Ulgen and colleagues note in their July research piece titled “Emerging Markets: Rally’s resilience” that EMs are witnessing record weekly inflows even after the Brexit vote.

Six drivers to propel enhanced EM sentiment

Ulgen and team point out that the U.K.’s vote to leave the EU hurt sentiment only temporarily. They argue that expectations of even further accommodation by core central banks and limited trade and financial links between the U.K. and EMs facilitated investors in using it as an opportunity...