【英文】J.P. 摩根报告：年中新兴市场展望与策略：下半年疫情负面影响将持续（94页）

英文研究报告 2020年06月30日 06:21 管理员

The improving BoP dynamic has helped EM FX on several fronts, though this may not last to year end. EM FX sold off significantly in 1Q20 due to the large EM portfolio outflows over the period, coupled with the deterioration in EM terms of trade. The improvement in external balances in 2Q20, coupled with the cessation of EM portfolio outflows in April and May – both of which reported small inflows (Exhibit 15) – is giving EM BoP an all-round boost helping to support EM FX. This BoP “sweet spot” for EM can continue in the short run as these drivers are still playing out. However, risks of a reversal in these dynamics increase further into 2H20 as the effect of China's V-shaped recovery begins to diminish, weighing on China’s import demand from EM and on the EM-DM growth differential more broadly (a driver of EM capital flows). There is also a higher risk that a second COVID-19 wave again weighs on EM portfolio flows.

A sustained bounce in risk appetite can attract near-term EM portfolio inflows, but history shows that a full recovery can take many months. March saw unprecedented portfolio outflows from EM debt and equity markets, with the pace (but not level) of EM retail bond outflows exceeding the GFC. Since then, there has been a tepid recovery in EM portfolio flows, while the recent bounce in risk appetite is spurring inflows. Previous bouts of large EM outflows (Exhibit 16, Exhibit 17) show that periods of inflows are common after sharp outflows, but a full retracement of portfolio flows can take a much longer period. For EM retail bond funds, it took over a year from the start of the GFC to reverse redemptions. From the start of the so-called taper tantrum it took 4 years to fully offset outflows. Outflows in the current episode are not as severe as previous crises (peak outflow of 9% of AUM to-date), but history shows that the recovery period is typically much longer than the outflows period. In our view, there are unlikely to be EM-dedicated bond fund inflows overall in 2H20 (see EM Technicals for further detail).