Emerging market assets have broadly underperformed in the past week or so, underscoring the collapse in confidence in several emerging Asian economies.
There are a few explanations for the sudden drop-off, which include China’s economic weakness and possible credit squeeze concerns, the withdrawal of global liquidity as the Federal Reserve tapers its asset purchase programme and economic problems and political instability in countries such as Thailand.
These concerns have not only led to a selloff in Asian equity markets with the Hang Seng Index losing 2.9% to close at 21,397.77 on Wednesday, its lowest level since July but debt markets have also underperformed.
Asian...
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