Posted June 11, 2014 1:00 am by Comments

ING IM’s Marco Ruijer, who runs the ING EM Debt Hard Currency fund along with a Frontier Markets debt fund, has recently told Citywire Global that a Chinese growth slowdown and US monetary policy are the biggest risk factors for frontier markets. He commented:

“Every year China is slowing. It has gone from 10% GDP growth down to 7% and it may go to 5%, but it is all about risk sentiment. The only real worry there is in parts of the real estate and financials sector, but 6% overall growth is okay, and will never be achieved again by most western countries.”

In addition:

“ECB action is more important than the BoJ, but much less important than the Fed. If the US looks stronger in Q2 and treasuries start moving in Q2, we could see a bit of profit taking in emerging markets, which would not hurt.”

Despite his long term optimism, Ruijer is braced for the next emerging market country crisis to hit investor sentiment again, and he is wary of Venezuela at present. He is also avoiding both Dubai and Kuwait, as he believes their valuations are too rich, but he has been adding to Kazakhstan, which has been sold off due to its proximity to Russia and the ongoing Ukraine crisis.

To read the whole article, ING IM’s Ruijer: China and the Fed biggest risks to frontier markets, go to the website of Citywire Global.

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