Date
17 January 2019
Most credit officers at financial institutions had raised bets over the course of 2018 that the value of emerging market assets would fall, according to a US central bank survey. Photo: Reuters
Most credit officers at financial institutions had raised bets over the course of 2018 that the value of emerging market assets would fall, according to a US central bank survey. Photo: Reuters

Survey points to a scaling back of bets on emerging market gains

Most financial market credit officers surveyed by the US Federal Reserve in November said their big clients were exposed to emerging markets but were scaling back bets emerging market assets would rise in value, Reuters reports.

The central bank surveyed senior credit officers at 23 institutions between Nov 6 and Nov 19, asking them about a range of market conditions, according to the report.

“About three-fourths and two-thirds of the respondents reported that their hedge fund and mutual fund clients, respectively, have some exposure to emerging markets,” the Fed was quoted as saying on Thursday.

The US central bank said it had included questions on emerging market exposure given the “turmoil” seen in emerging markets this year.

For most client types, survey respondents said between two-fifths and three-fifths held net-long positions on emerging market assets, meaning they were betting on increases in the values of the assets.

But most clients had also increased bets over the course of 2018 that the value of emerging market assets would fall, the Fed said, citing the survey responses.

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RC

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