Emerging market investors turn increasingly bullish for Q2: HSBC survey

By Reuters

  • 23 Mar 2023
Credit: Reuters

Nearly half of emerging market investors are bullish on prospects for developing markets in the second quarter, a survey by HSBC showed on Thursday, thanks to rising optimism following the reopening of the Chinese economy.

Some two thirds of the respondents expected emerging equities to outperform those of the developed economies in the next three months, the survey of 138 investors from 133 institutions, conducted between Jan. 24 and March 6, found.

More than two thirds of the respondents expected emerging currencies to beat those of developed markets in the same period. Those surveyed represent $547 billion in assets under management.

"Asia has seen the largest improvement in sentiment, largely reflecting the expectations of a strong rebound of Chinese economic activity," said Murat Ulgen, Global Head of Emerging Markets Research at HSBC.

The MSCI emerging market equity index has risen 2% since the start of the year, though those gains come in the wake of a 22% tumble in 2022 - the biggest annual drop for the benchmark since the 2008 financial crisis.

The overall tally of investors bullish about prospects for emerging market assets rose to 47% from 29% in the previous survey in December.

Risk appetite also improved slightly compared with the prior poll.

The poll was conducted before the recent financial market turmoil following the sudden failures of two U.S. lenders and an emergency sale of embattled Swiss banking behemoth Credit Suisse.

Investors said their main concern was still the possibility of recession in major economies.