Conning ConnText Podcast: Geopolitical Risks Add Pressures to U.S. Economy and Emerging Market Corporate Landscape
April 22, 2022
U.S. Economic Recovery Should Continue; EM Corporate Performance More at Risk to Interest Rates, Inflation, Monetary Policy Than Russia-Ukraine Conflict
HARTFORD, CT – April 22, 2022 —Leading global investment management firm Conning has posted its latest Conning ConnText quarterly podcast which examines how the tragic Russian assault on Ukraine has further complicated economic conditions in 2022 but adds that reasons for optimism remain. The podcast also discusses how the broad, diversified landscape for emerging markets (EM) corporate debt is being affected by the conflict.
Rich Sega, Conning’s Global Chief Investment Strategist and host of the podcast, said that the year started with a positive outlook for continued growth. The outbreak of war has raised concerns about demand destruction and supply interruptions in energy and commodities markets, and the fallout of sanctions on Russia. “The world is slowing down in the wake of turmoil,” Sega said. “Europe is directly affected and much more vulnerable to the impacts of the war than the U.S.; still, it threatens everyone.”
At the center of the conflict, and in fact those who may be most severely affected, are EM countries. EM corporate fundamentals remain robust, said Alia Yousuf, who analyzes EM corporate credit for Conning affiliate Global Evolution, but adds that slower growth, higher inflation and tighter financial conditions could make the macro environment more challenging.
“In the near term, EM corporates performance will be driven by the geopolitical risk that we are seeing in Russia and Ukraine,” said Yousuf. “But in the medium term, the trajectory would depend more on the interplay between rates, inflation and monetary policy and how that affects the demand for the asset classes as well as all of emerging market fixed income and global credit more broadly.”
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Conning (www.conning.com) is a leading investment management firm with approximately $203 billion in global assets under management as of March 31, 2022.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of March 31, 2022, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.
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