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#NIRPREFUGEES is among the latest hashtags to be doing the rounds on micro blogging site Twitter. The term perfectly explains what has been happening in global markets for some time now—investors abandoning countries that are following or approaching negative interest rate policies (NIRP), in search of higher-yielding assets across emerging markets. Hence the hashtag #NIRPREFUGEES. From bonds to equities, investors are rushing across markets and borders to grab higher-risk but higher-yielding assets before their neighbours do.

While this has been happening for some time now, the numbers are starting to tell the extent to which this is happening.

A record $18 billion has been deposited into emerging market debt funds in the last 6 weeks, according to a 16 August Financial Times report, which quotes data from Bank of America Merrill Lynch and EPFR (an agency which tracks fund flows to emerging markets). The impact of this is there to see across emerging-economy bond markets, where yields have fallen to multi-year lows.

While India has seen its benchmark yield fall by 38 basis points since 24 June (when the Brexit vote sparked a global bond rally), others like Indonesia (10-year yield down 77 basis points) and South Africa (10-year yield down 67 basis points) have seen even steeper falls. In many of these markets, bond yields are trading at the lowest levels in years. For instance, the Indian benchmark 10-year bond is trading at the lowest levels since 2009, despite some recent moderation in the pace of the rally. Likewise, in China the 10-year bond yield is trading near the best levels in 7 years. One basis point is one-hundredth of a percentage point.

What started as a strong gush of money in emerging market bonds, soon found its way into equities as well. This is natural because in a number of these economies, lower yields tend to benefit market leaders like banks while also bringing some strength to emerging-market currencies. The latest edition of the Bank of America-Merrill Lynch fund manager survey shows that fund managers have cut back on the record levels of cash that they were sitting on till last month, to buy into emerging-market equities. According to a 17 August Reuters report, the allocation to emerging-market stocks rose to a net 13% overweight—the highest since September 2014. This was up from 10% last month.

The result has been a strong rally across emerging-market equities. The MSCI Emerging Market index is now up nearly 9% since 24 June, compared to the 2.4% gain seen across the MSCI World Index.

Emerging-market currencies have followed a similar direction with the South African rand, the Korean won and the Brazilian real gaining between 4% and 7%. India, where the central bank has kept the currency on a tight leash, is an exception and has seen an under 1% appreciation since late June. The question then is, whether emerging markets are simply benefitting from the TINA (there is no alternative) factor? And could then the trend reverse, should an alternative (say, in the form of a rebound in developed market yields or equities) emerge? That’s always possible but there is also an argument to be made in favour of emerging markets based on their steady (and in some cases improving) fundamentals.

“The outlook for emerging market economies has stabilised, due to a combination of the modest recovery in commodity prices, better capital flows and a better near-term outlook for growth in China," said Moody’s Investors Services as part of its global economic outlook report released on Wednesday.

The much-feared recovery in commodity prices has been modest. Since the start of this year, the Thomson Reuters commodity index has gained 6%, although oil has gained a steeper 34%. Even with those gains, commodities are holding near goldilocks levels. Not high enough to impact oil importing emerging economies negatively, and not low enough to trigger another bout of risk aversion.

The China risk, too, has moderated or at least appears to have moderated. Analysts are attaching a lower probability to a sharp slowdown in China and the yuan depreciation scare has abated somewhat. Since the first bout of devaluation, almost exactly a year ago, the Chinese currency has depreciated just about 6.2%.

In addition, there is reason to be optimistic about individual emerging-market economies. In India, there has been some pick-up in reform momentum with the goods and services tax being finally passed. In Russia and Brazil, the economic woes are expected to ease. The Moody’s report cited above says that Russia will emerge from the currency recession in the second half of the year, while the Brazilian economy could stabilise next year. That’s not to say that risks, both old and new, cannot re-emerge. The continuing risk of a rate hike in the US comes back to the fore each time a US Federal Reserve official makes a mildly hawkish comment.

There is an Organization of the Petroleum Exporting Countries (OPEC) meeting coming up as well, with some talk that an output freeze may still be on the discussion table. Also, there are some new risk factors emerging.

“The political and geopolitical risks, including a rise in nationalist and protectionist policies, are among the downside risks to global growth. In this context, the most immediate risk is a potential renegotiation of global trade pacts and security alliances, after this year’s US presidential election," said Moody’s in its analysis of emerging-market economies.

Ira Dugal is deputy managing editor, Mint

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