Moody's Talks - Emerging Markets Decoded

Risk exposure is highest for those directly involved in the region’s three main hotspots. But the knock-on economic effects of the tensions have the potential to hurt, or help, other APAC governments.

Guest: Anushka Shah, Vice President - Senior Credit Officer, Sovereign Risk Group, Moody's Ratings

Host: Vittoria Zoli, Analyst, Credit Strategy & Guidance, Moody's Ratings

Related Research:

• Sovereigns – Asia-Pacific: Geopolitical risk shapes creditworthiness for a host of governments

India's large domestic market shields its companies from external shocks, whereas Indonesia's export-dependent commodity sector prompts government efforts to diversify growth.

Guests: Rachel Chua, VP-Senior Analyst; Sweta Patodia, AVP-Analyst

Host: Vittoria Zoli, Analyst, Credit Strategy & Guidance, Moody's Ratings

Related Research: 

• Nonfinancial Companies – India and Indonesia: Credit quality will remain robust, even as earnings trajectory diverges
• Nonfinancial Companies – Southeast Asia Dollar bond issuance will regain momentum when US interest rates begin to fall
• Nonfinancial Companies – India: Offshore funding indispensable despite improving domestic liquidity

Challenges include the region’s reliance on fossil fuels to meet energy demand amid population growth, the companies’ weak financials and governments’ reliance on revenue from oil and gas producers.

Guests: Roxana Munoz and Carolina Chimenti, both Vice President - Senior Analysts, Corporate Finance Group, Moody's Ratings

Host: Vittoria Zoli, Analyst, Credit Strategy & Guidance, Moody's Ratings

Related research:

• Oil & Gas – Latin America & Caribbean: National oil companies struggle to reconcile governments' emission-reduction goals

Rate hikes in Turkiye have slowed inflation, and confidence in the country’s currency is increasing. The sovereign’s creditworthiness is improving as a result, along with that of Turkish companies.

Guests: Kathrin Muehlbronner, Senior Vice President, Sovereign Risk Group, Moody’s Ratings; Iker Ballestero Barrutia, Analyst, Corporate Finance Group, Moody's Ratings

Host: Vittoria Zoli, Analyst, Credit Strategy & Guidance, Moody's Ratings

Related Research:

• Moody's Ratings takes rating actions on eight Turkish corporates following upgrade of Turkiye sovereign rating
• Government of Turkiye – B1 positive: Update following upgrade to B1, outlook remains positive
• Government of Turkiye: Macro-financial monitor: CBRT tightening shows first results, but more is needed to moderate inflation
• Moody's Ratings upgrades Turkiye's ratings to B1, maintains positive outlook
• Government of Turkiye: Announced policy shift is credit positive but implementation comes with challenges

The opposition to proposed tax hikes impedes the government’s ability to increase revenue and reduce debt. Similar risks exist for other emerging market sovereigns too.

Guest: David Rogovic, Vice President - Senior Credit Officer, Sovereign Risk Group, Moody’s Ratings

Host: Scott Phillips, Head of Emerging Markets, Credit Strategy and Research, Moody’s Ratings

Related Research:

• Moody's Ratings downgrades Kenya's ratings to Caa1; maintains negative outlook
• Government of Kenya: Protests against Finance Bill's tax measures challenge government's fiscal consolidation strategy
• Government of Kenya: Kenya's IMF agreement bolsters short-term liquidity; fiscal consolidation is key to improving credit quality
• Sovereigns – Sub-Saharan Africa: 2024 Outlook - Negative on large debt maturities amid tight funding conditions

We have revised our aggregate EM forecast up slightly to 3.9% for 2024-25 to reflect faster-than-expected growth in some of the largest EMs so far this year. Disinflation continues but is slowing.

Speaker: Madhavi Bokil, Senior Vice President, Credit Strategy at Moody's Ratings

Host: Vittoria Zoli, Analyst, Emerging Markets at Moody’s Ratings

Related Research:

• Emerging Markets – Global: GDP growth stays solid; disinflation slows
• Global Macro Outlook 2024-25 (May 2024 update): G-20 momentum persists in 2024 with disinflation and cooler growth ahead

The creation of a coalition government following 29 May elections will likely support broad policy continuity and reforms, but the risk of government instability and ineffectiveness is significant.

Guest: Aurelien Mali, Vice President-Senior Credit Officer, Sovereign Risk Group, Moody's Ratings

Host: Scott Phillips, Associate Managing Director, Credit Strategy & Research, Moody's Ratings

Related research:

• Government of South Africa: National unity government will likely support broad policy continuity and the pursuit of economic reforms

Moody’s Ratings experts discuss the fragile recovery and new threats in EMs, including macro conditions, default trends, credit risks for sovereigns and corporates, and bright spots.

Host: Scott Phillips, Associate Managing Director, Moody’s Ratings

Related Research:

• Fragile recovery in EM credit conditions will continue
• Emerging Markets – Global: Local currency bond markets are growing fast, a credit-positive trend for debt issuers
• Sovereigns – Emerging Markets: Favorable financing conditions will not solve structural credit challenges
• Government-Related Issuers – Emerging Markets: GRIs’ standalone credit strength and government support vary widely across EMs
• Banks – Emerging Markets: Asset-quality risk is receding but remains high in several countries

To learn more, visit the Emerging Markets topic page.

Join Scott Phillips, head of EM at Moody’s Ratings, and Maciej Woznica, portfolio manager at asset management firm Coeli, for a tour of the least-developed emerging markets.

Guest: Maciej Woznica, Portfolio Manager, Coeli

Host: Scott Phillips, Associate Managing Director, Moody’s Ratings

Related Research:

• Gradual recovery in emerging market credit conditions will continue (infographic)

The default rate will decline to 3.3% by the end of Q1 2025, far below the peak of nearly 15% at the end of 2022 which was driven by the Russia-Ukraine war and China’s property market woes.

Guest: Yang Liu, Vice President - Senior Analyst, Moody's Ratings

Host: Scott Phillips, Associate Managing Director, Moody’s Ratings

Related Research:

• Corporates – Emerging Markets: EM corporate default rate will fall further in 2024 and approach advanced economy rate
• Default Trends – Global: Annual default study: Corporate default rate to moderate in 2024 but remain near its long-term average