WEDNESDAY, MARCH 11TH, 2020: DAY TWO – EMERGING MARKET SELECTION AND OUTLOOK
Wednesday, March 11th, 2020
Some countries use barriers and protections to deal with sovereign vulnerabilities as they grow more pronounced. Why has recent contagion risk changed, and is that likely to stay in place for the next 12-18 months?
•Map vulnerabilities by macro environments and by countries
•Emphasize how liquidity problems in Argentina and Turkey did not lead to broader-scaled problems in the last 1-2 years
•Grapple with why this change occurred and whether it is likely to last further
From Russian sanctions to Middle Eastern unrest to the weakening of democracy in Turkey and Venezuela, and the rise of nationalist strongman leaders worldwide, political risks will always have an impact on your regional FI portfolio. If you know the strategic political objectives of EM governments, you should be able to purchase securities that match those. In that case, the government is more likely to support those companies so it has the werewithal to repay its needs.
•Determine whether you are willing to take on sovereign risk
•Recap the most concerning geopolitical challenges in EM regions
•Recognize trends in liquidity driven by external politics
•Mitigate exposure to troubled regions