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Emerging Markets

The Philippines: Can Rate Hikes Stop The Peso Slide?
Since early 2023, the Philippine peso has depreciated by 8% versus the US dollar despite the country’s central bank pushing up real policy rates by 500 basis points. BCA’s Emerging Markets Strategy argues that raising policy rates has not helped the currency…
Daily Insights
South Africa: What Is The Optimum Policy?
South African stocks, domestic bonds, and currency have all rallied since BCA’s Emerging Markets Strategy team upgraded South African assets last month following the formation of the new national unity government. The rally's persistence, however, will depend…
Daily Insights
The Culprit Behind Poor EM Performance
According to BCA Research’s Emerging Markets Strategy service, extremely disappointing corporate profit growth has been the main reason for EM's poor equity performance in absolute terms and massive underperformance relative to the US/DM. EM earnings per…
Daily Insights
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When Will EM Stocks Rally?

The failure of EM stock prices to rally over the past 13 years is rooted in their companies’ inability to grow their profits. Even though EM equities appear cheap based on their cyclically adjusted P/E ratio, there has been a regime change in EM corporate profitability. Therefore, the CAPE model should not be used to value EM stocks now.

Emerging Markets Strategy by Arthur Budaghyan
China Faces Daunting Challenges
As highlighted in Wednesday’s edition of BCA Live & Unfiltered, the Chinese economy and its financial markets face several daunting challenges. Its demographic outlook is unfavorable, with a low birthrate stifling population growth; the grim math of…
Daily Insights
The Indian Stock Rally Is Running On Fumes
Our colleagues from the Emerging Markets Strategy team argue that investors should brace for a significant correction in Indian stocks in the coming months. They posit that the pillar of Indian corporations' sustained profit growth — surging revenues — is…
Daily Insights
The PBoC Will Resist a Swift RMB Devaluation
The Chinese currency has been under considerable depreciation pressure due to capital outflows. Additionally, the economy is grappling with debt deflation and a balance sheet recession, conditions that typically call for lower interest rates and a weaker…
Daily Insights
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Will China Devalue The Yuan Significantly?

Is the RMB cheap or expensive? Based on trade accounts, the yuan is inexpensive, but the RMB is vulnerable due to capital outflows. Yet, Beijing will not resort to a rapid devaluation for now, and the option of floating the currency is improbable. The PBoC will allow a gradual depreciation of the yuan versus the dollar, say around 5%, in the next six months.

Emerging Markets Strategy by Arthur Budaghyan
Are Chinese Bond Markets Due For A Reversal?
According to BCA Research’s China Investment Strategy service, onshore bonds are vulnerable to an investor sentiment reversal. Chinese 10-year government bond yields will likely trend lower to below 2% over the next 12 months. Investors have been piling…
Daily Insights
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China’s Bond Market Rally: A Tipping Point?

The PBoC appears increasingly uncomfortable with the rapid decline in the Chinese government bond yields. While the PBoC will succeed in temporarily curbing investors’ enthusiasm for bonds, the central bank will be unwilling to raise interest rates and unable to intervene in the bond market in any meaningful and lasting way.

China Investment Strategy by Jing Sima

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