Emerging market investors eye frontier assets shielded from Trump's tariff threats | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Sunday
July 13, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SUNDAY, JULY 13, 2025
Emerging market investors eye frontier assets shielded from Trump's tariff threats

Global Economy

Reuters
27 January, 2025, 01:00 pm
Last modified: 27 January, 2025, 01:05 pm

Related News

  • Impact of US tariffs varies across European Union
  • Europe should activate countermeasures against Trump tariffs
  • Trump intensifies trade war with threat of 30% tariffs on EU, Mexico
  • Dhaka, Washington yet to agree on 20% of US tariff conditions: BGMEA
  • Trump says he will speak to Lula at some point as Brazil downplays tariff impact

Emerging market investors eye frontier assets shielded from Trump's tariff threats

Trump's return to the White House put Mexico's peso on a roller coaster, further drained enthusiasm for foreign investing in China and cooled hopes of a golden era for emerging markets

Reuters
27 January, 2025, 01:00 pm
Last modified: 27 January, 2025, 01:05 pm
A woman displays a selection of Kwacha notes, the national currency and money used in Zambia in Lusaka, Zambia February 27, 2024. Photo: REUTERS/Namukolo Siyumbwa/File Photo
A woman displays a selection of Kwacha notes, the national currency and money used in Zambia in Lusaka, Zambia February 27, 2024. Photo: REUTERS/Namukolo Siyumbwa/File Photo

The new era of unpredictability, marked by tariff threats and rising global tensions, is prompting emerging market investors to look for shelter in frontier markets that are relatively safe from US President Donald Trump's trade policy shifts.

Trump's return to the White House put Mexico's peso on a roller coaster, further drained enthusiasm for foreign investing in China and cooled hopes of a golden era for emerging markets.

So-called frontier markets are the riskiest in EM and often smaller developing economies in Africa, Eastern Europe, Asia and even Latin America. They aren't exactly a safe be but investors say they are strong investment destinations this year because they are not in Trump's firing line for tariffs and other policy shifts.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Economies like Serbia have the added allure of sturdy growth, while for Ghana, Zambia and Sri Lanka, emergence from debt default allows them to focus on reforms and growth.

"The frontier markets are likely to be more insulated than the others, because I don't think that countries like Nigeria or Sri Lanka or Paraguay ... will be a target anytime soon for this administration," said Thierry Larose, an emerging market portfolio manager with Vontobel.

"They have their own idiosyncratic risk, but they're pretty much immune to the risk-on risk-off affecting the mainstream emerging markets," he said, calling them an "extremely powerful engine of diversification".

For Anton Hauser, senior fund manager with Erste Asset Management, assets such as Serbian local bonds are good bets to capture strengthening economic growth in Eastern Europe.

HIGH YIELD AND HIGH PERFORMANCE?

A riskier global climate often sends investors rushing for safe-haven assets such as US Treasuries, gold or German government bonds.

The COVID-19 crisis and the fallout from Russia's invasion of Ukraine saw investors ditch frontier markets in their flight to safety; several of them tumbled into sovereign default.

Chart: Reuters
Chart: Reuters

But the backdrop might be different with the famously mercurial Trump's second presidency.

Some of the riskiest debt bets - such as Argentine, Lebanese, Ukrainian and Ecuadorean international bonds - outperformed spectacularly last year.

Many expect similarly idiosyncratic stories - driven chiefly by local dynamics - to drive returns again over 2025.

"High yield has also done generally pretty well - it's been doing well for a few months now," said Nick Eisinger, co-head of emerging markets with Vanguard, adding: "We still think those are interesting parts of the market."

Like Larose, he cited frontier markets, notably in Africa, as "unlikely to be systematically influenced by geopolitical or global macro factors".

Investors cited multiple other countries - many of which have struggled to attract foreign cash - including Egypt, Nigeria and the Dominican Republic - as good targets.

Zambia, Ghana and Sri Lanka, which recently emerged from debt restructuring deals, are also attractive bets this year, they said.

But there are some bright spots among larger, non-frontier emerging economies too, such as Turkey and South Africa.

Turkey has become a popular play for foreign cash since it returned to orthodox fiscal policy in 2023, and recently embarked on a rate-cutting cycle and could benefit from reconstruction in Syria and Ukraine.

South Africa, investors said, is less reliant on exporting to the United States, could benefit from falling oil prices and has a mix of commodity exports that could help it weather geopolitical turmoil.

"The few trades that... have surprised the last few weeks have been low beta, low correlation trades with the dollar," said Marek Drimal, lead CEEMEA strategist with Societe Generale. "Turkey is a prime example. They've been doing quite alright."

Drimal also cited bets on foreign exchange forwards in Egypt and treasury bills in Kenya.

But it's not a free pass for all emerging economies.

JPMorgan downgraded its recommendation on Panama's bonds after Trump ramped up his threat this week to "take back" the Panama canal.

Silver-lining stories from the previous Trump administration might be less lucky this time, too, especially those who benefited from diverted Chinese trade.

"Mexico, Vietnam, Malaysia... will be more targeted," said Magda Branet, head of emerging markets with AXA Investment Managers. "Trump will look to close these loopholes."

Top News / World+Biz

Trump Tariffs / Emerging markets

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Home Affairs Adviser Lieutenant General (retd) Jahangir Alam Chowdhury at the 11th meeting of the Advisory Council Committee on Law and Order on Sunday, 13 July 2025. Photo: TBS
    Combing operation may begin at any time to catch identified criminals: Home adviser
  • Representational image/Collected
    Mitford murder: 2 more accused arrested
  • A file photo of the NBR Bhaban in Agargaon, Dhaka
    NBR split certain, but ordinance flaws need fixing: Energy adviser

MOST VIEWED

  • RAB Director General AKM Shahidur Rahman speaks at the press briefing on a fake bomb threat on Biman Bangladesh flight on Saturday, 12 July 2025. Photo: TBS
    Mother faked bomb threat on Biman flight to stop married son from flying with girlfriend: RAB
  • Bangladeshi garment workers make clothing in the sewing section of a factory in Gazipur, Bangladesh, April 9, 2025. Photo: REUTERS/Mohammad Ponir Hossain/File Photo
    Some Walmart garment orders from Bangladesh on hold due to US tariff threat
  • Infographic: TBS
    Dollar price plummets by Tk2.9 in a week as demand wanes
  • Bangladesh and US hold tariff talks on 11 July 2025. Photo: CA Press Wing
    Dhaka, Washington yet to agree on 20% of US tariff conditions: BGMEA
  • Infograph: TBS
    Matarbari power plant eyes G2G coal deal with Indonesia after quality setbacks
  • Dr Mohammad Zakir Hossain, managing director of Delta Pharma Ltd and secretary general of the Bangladesh Association of Pharmaceutical Industries (BAPI). Sketch: TBS
    Pharma industry grew with policy support, needs it again to survive: BAPI secretary general

Related News

  • Impact of US tariffs varies across European Union
  • Europe should activate countermeasures against Trump tariffs
  • Trump intensifies trade war with threat of 30% tariffs on EU, Mexico
  • Dhaka, Washington yet to agree on 20% of US tariff conditions: BGMEA
  • Trump says he will speak to Lula at some point as Brazil downplays tariff impact

Features

The 2020 Harrier's Porsche Cayenne coupe-like rear roofline, integrated LED lighting with the Modellista special bodykit all around, and a swanky front grille scream OEM Plus for the sophisticated enthusiast looking for a bigger family car that isn’t boring. PHOTO: Ahbaar Mohammad

2020 Toyota Harrier Hybrid: The Japanese Macan

23h | Wheels
The showroom was launched through a lavish event held there, and in attendance were DHS Motors’ Managing Director Nafees Khundker, CEO Imran Zaman Khan, and GMs Arman Rashid and Farhan Samad. PHOTO: Akif Hamid

GAC inaugurate flagship showroom in Dhaka

23h | Wheels
After India's visa restriction, China's Kunming is drawing Bangladeshi patients

After India's visa restriction, China's Kunming is drawing Bangladeshi patients

1d | Panorama
Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

2d | The Big Picture

More Videos from TBS

Legal fight if 'Shapla' symbol is not given: NCP

Legal fight if 'Shapla' symbol is not given: NCP

21m | TBS Today
Prisoner sentenced to prison for not showing news of president in Tunisia

Prisoner sentenced to prison for not showing news of president in Tunisia

2h | TBS World
The price of the dollar is falling; how much can it fall?

The price of the dollar is falling; how much can it fall?

3h | TBS Stories
110 killed in Israeli strikes in Gaza

110 killed in Israeli strikes in Gaza

4h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net