Sumary of Fund manager Ashmore snaps up Brazil, China local currency bonds:
- Article content LONDON — Fund manager Ashmore Group has bought Brazilian and Chinese local currency bonds as it remains focused on broader emerging market local debt, betting on strong performance during 2021..
- Brazilian markets have had a tough start to 2021, with local currency bonds selling off by around 170 basis points and the real currency sliding 7% against the dollar as concerns about politics surfaced and as the country battles the world worst daily COVID-19 death toll..
- Ashmore, with assets under management of $93 billion at the end of 2020, was buying Brazilian local bonds, in part due to the belief that there was “too much political risk premium”.
- Some investors have worried about political interference after the exit of the heads of state-owned companies Petrobras and Banco do Brasil following tussles with President Jair Bolsonaro..
- The prospect of leftist former president Luiz Inacio Lula da Silva seeking election next year is heaping pressure on Bolsonaro to boost social spending, potentially diminishing chances of reform..
- They delivered a return of 0.3% during the first quarter, compared to negatives of 6.7% in JPMorgan Government Bond Index Emerging Markets Global Diversified and 2.3% in five-year U.S..
- China inclusion in the FTSE World Government Bond Index (WGBI) from the end of October this year is expected to suck in billions of dollars of inflows into the world second-largest economy….