Emerging Markets Corporate Strategy: 2026 Mid-Year Outlook

研报英文原文证据摘录

Emerging Markets Corporate Strategy: 2026 Mid-Year Outlook

Summary

Summary View

EM corporates overall IG HY

Global growth has been robust at above potential YTD supported by AI investments, offsetting uncertainties from the disruption

of the Strait closure and higher oil prices. Our economists think strong growth momentum and patient CBs point to a constructive

baseline, which is reinforced by the recent US-Iran deal. That said, inflationary pressure is pushing up rates globally, raising concerns

Macro about whether the tight credit spreads and fundamentals will hold. Our assessment is that CEMBI issuers should be less exposed to the

negative repercussions from higher rates compared to history as well as other EM asset classes, though with differences by region and

sector.

We lowered our baseline CEMBI spread target for end-2026 to 180bp from 210bp, but higher rates moderate return expectations

to +3.8% for the year. CEMBI spreads can stay around the compressed levels due to favorable macro growth, strong technicals, buoyant

Overall market tone, and broadly robust fundamentals. We maintain MW given spreads remain at the tight end of the historical range, but the

environment remains conducive for carry-plus compression trades in select segments into 2H26 with continued commodity

outperformance.

Robust supply but not exuberant, met by supportive demand. Forecast $460bn in gross supply with net financing still a small negative

at -$20bn, but $262bn YTD is running slightly below expectation. Spillover of AI capex from DM HG and EUR issuance could be swing

Technicals factors for technicals, but well absorbed so far. EM bond fund flows expected to improve further to $40-50bn, while positioning in EM

corporates remains light across EM dedicated and crossover investors.