Analysts Who Warned of Emerging-Market Rout Expect Painful 2019 - Bloomberg

Analysts Who Warned of Emerging-Market Rout Expect Painful 2019 - Bloomberg:

If Jason Daw is right, some of the world’s biggest investors are setting themselves up for a major disappointment.

The Singapore-based strategist at Societe Generale, one of the few to anticipate the slump in emerging markets beginning in January, sees no imminent turnaround for the asset class. He said the modest rally in currencies since September, led by Turkey’s lira, Brazil’s real and South Africa’s rand, is temporary and that slower global growth and additional tightening by the Federal Reserve will continue to weaken developing-nation currencies. 

“It will be a multi-year process for investment behavior to adapt to less generous dollar liquidity conditions after a decade of easy money,” he said. “The hurdle for capital to flow back into emerging markets is high and a significant macro catalyst is required to turn the narrative around.”