BofA 2024 emerging markets outlook

Bank of America's Managing Director and Head of Global Emerging Markets, David Hauner, shared insights on the outlook for emerging markets in 2024 in a recent interview on CNBC Africa. Hauner expressed optimism for the upcoming year, projecting a 'soft landing' that would benefit emerging market asset prices. He highlighted a shift in global growth from the US to emerging markets, with countries like India, ASEAN markets, and China expected to drive much of the growth. Hauner anticipated a weakened dollar and predicted that central banks, including the Fed, would start cutting rates, leading to increased capital flows into emerging markets. He noted that lower global interest rates and a weaker dollar are crucial factors for emerging market returns and capital flows. In terms of asset classes, Hauner favored bonds over equities, citing a global economic slowdown and lower growth in developed countries as reasons for the preference. He highlighted the attractive yield levels in emerging market bonds, which could appeal to foreign investors as central banks reduce rates. While discussing the potential risks to the outlook, Hauner identified another surge in inflation as a major concern, emphasizing the impact it could have on asset prices globally, particularly in emerging markets. He also addressed the implications for countries with strong trade ties to China, such as South Africa, noting that China's export of low inflation could benefit bond-related assets in these countries. Overall, Hauner's outlook for emerging markets in 2024 remained positive, with a focus on lower rates, stable growth, and increased capital flows. Investors are advised to monitor key macroeconomic indicators and global developments to navigate potential risks and opportunities in the emerging markets landscape.