Macro Hive Conversations With Bilal Hafeez
Ep. 233: Mirza Baig on Best EM Trades, Fed Easing and China Carry Trade
Sep 13, 2024
Mirza Baig, a senior EM strategist with two decades in global FX and rates, shares his insights on emerging markets and the contrasting performance dynamics of China. He discusses the cautious optimism for Chinese stocks and the attractiveness of India's bond market to foreign investors. Baig emphasizes the importance of emotional regulation in trading and offers advice for young graduates entering finance, highlighting the need for proactivity and continuous learning in a rapidly changing workforce.
30:23
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Quick takeaways
- Despite recent struggles, emerging markets may present unique investment opportunities in the long-term due to favorable demographics and improving fiscal conditions.
- China showcases a complex economic landscape where technology sectors prosper amidst broader challenges like high youth unemployment and deflationary pressures.
Deep dives
Challenges in Emerging Markets Performance
Emerging markets (EM) have struggled over the past few years, underperforming developed markets significantly since the onset of COVID-19. Hard currency bonds in EM fell short compared to U.S. high-yield credits, with local currency bonds also lagging. This decline in performance has diminished foreign investment interest, leading to a notable reduction in foreign ownership across EM equity markets. The general sentiment among investors is pessimistic, with many asset managers shifting focus from EM to developed markets for better returns.
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