A quarter of investors surveyed by HSBC are bearish about investing in emerging markets, thanks to slowing economic growth and imminent monetary tightening by the US Federal Reserve, according to Reuters. Sentiment is low compared to an earlier survey, which found that only 10 investors were bearish about EMs. The prior survey also saw a higher proportion of 40% feeling bullish, compared to only 27% this time around.

Worries over when the Federal Reserve will raise interest rates in response to accelerating inflation are weighing on EMs, with investors naming policy tightening the biggest risk for the asset class. The poll featured 120 investors from 115 institutions with USD 572 bn in AUM.

This comes at a time when rising inflation and supply-chain disruptions are already making 2021 a year to forget for the asset class. Investors have sold local-currency debt, many currencies have fallen significantly, and EM equities are seriously lagging versus developed markets, currently trading at their biggest discount in 17 years.

THE CLOSING BELL-

The EGX30 fell 0.2% at yesterday’s close on turnover of EGP 897 mn (38.5% below the 90-day average). Local investors were net sellers. The index is up 4.7% YTD.

In the green: EFG Hermes (+6.7%), GB Auto (+4.3%) and Gadwa for Industrial Development (+2.3%).

In the red: Rameda (-4.1%), Fawry (-2.5%) and Credit Agricole Egypt (-1.4%).

Asian stocks are mostly down this morning as traders react to the release of the Fed meeting minutes yesterday, which indicated that the central bank is open to accelerating the taper should inflation continue to rise. Shares in the US and Europe are on course to open in the green later today.