高盛-新兴市场2019展望：狭隘的绩效之路（宏观）-20181120-26页_770kb

EM Outlook 2019 Summary

Core Content

Goldman Sachs' EM Outlook 2019 highlights the challenges and opportunities in Emerging Markets (EM) asset classes, emphasizing that the performance of EM assets will be driven more by relative value and idiosyncratic growth stories than by global beta. The report underscores the importance of a moderate macroeconomic environment and a narrow path to positive returns, given the ongoing US rate hikes and global growth concerns.

Main Points

1. A Look Back: Global Growth Down Matters as Much as US Rates Up

• The 2018 selloff in EM assets was driven by global growth slowdowns, not just US rate hikes.
• EM and G10 currencies depreciated against the USD, and EM and European equities underperformed.
• Unlike the 2013 "taper tantrum", which was primarily a US rate-driven event, 2018's EM selloff was more broad-based.
• Models show that global growth has had a significant impact on EM assets, at least as much as US rates.

2. A Look Ahead: Modest Headline Gains; Focus on Relative Value

• EM assets are expected to see modest gains in 2019, with low risk-adjusted returns.
• Relative value and idiosyncratic growth stories are more promising than broad beta.
• EM equities, FX, and local bonds are seen as having potential, though sovereign credit has the least upside.

3. EM Equities: Sharp Sell-Off Overstates Steady Earnings

• EM equities have experienced a sharp sell-off, but local earnings have remained steady.
• Valuations are now more attractive compared to historical levels and the US.
• Earnings growth is expected to improve slightly, but not significantly.
• The report prefers Asia over Latin America in EM equities due to better earnings growth potential and more attractive valuations.

4. EM FX: More Value, Decent Carry, Waiting for Growth

• EM FX is currently undervalued but not as much as in 2016.
• Moderate returns are forecasted for the asset class in 2019.
• Currencies like PHP, CLP, ILS, ZAR, and COP are highlighted as having potential for positive returns if global growth stabilizes.
• MXN is considered one of the most undervalued currencies, especially due to its high carry and good value.
• CNY, KRW, and TRY remain risky, with the latter still under pressure from domestic economic issues.

5. EM Local Rates: Mind the Gap Between High- and Low-Yielders

• EM local rates are expected to remain flattish, with bifurcation in risk premiums.
• High-yielders (ZAR, MXN, IDR, COP, INR) are likely to see lower long-end rates, while low-yielders (PLN, HUF, CLP, KRW, THB) may experience higher rates.
• The GBI-EM index is forecasted to provide ~10% returns on an unhedged basis, considering local bond yields and FX appreciation.

6. EM Credit: Back to Fair, But Balance Sheet Vulnerabilities Loom

• EM sovereign spreads are seen as fair relative to fundamental models.
• There is room for modest tightening (up to ~350 bp), but this is partly due to the inclusion of GCC economies in the index.
• USD sovereign bonds are expected to return ~5.5%, with ~6.8% current yield partially offset by higher US yields.

Key Information

• US rate hikes and global growth concerns are the two main drivers of EM asset performance in 2019.
• The Fed's hiking cycle is expected to continue, with ~2-3 more hikes priced in.
• EM valuations have improved, offering better risk/reward if growth stabilizes.
• EM equities are seen as the most attractive asset class, with a forecasted ~12% upside in USD terms.
• EM FX has a narrow path to performance, with relative value and specific growth stories being more important than broad beta.
• Frontier FX remains a high-risk, high-reward area, with some currencies like KZT, GHS, and UAH showing potential, while others like ARS remain vulnerable.

Asset Class Forecasts

Conclusion

The report concludes that EM assets have a narrow path to positive performance in 2019, driven by modest growth improvements, better valuations, and a moderate Fed hiking cycle. Investors are advised to focus on relative value and idiosyncratic opportunities, while being cautious about global beta and systemic risks. The overall macroeconomic environment is expected to be uncertain, requiring selective positioning and portfolio protection.