The largest American bank sends a global message regarding the Egyptian...

US investment bank Morgan Stanley said, Friday, that the time is right to increase exposure (buy) to emerging market currencies and their sovereign hard-currency debt, with the focus shifting to vaccine trading in the wake of the US elections, giving developing assets a boost.

Morgan Stanley investment bank is one of the largest banking institutions in the United States and the world.

“Emerging markets will be more fully involved in recovering global growth if an effective vaccine is distributed,” Morgan Stanley expert James Lord said in a note to clients.

Favorite currencies

“If this happens, we might see some swap in investors setting up positions away from areas of the global economy that have already recovered (like China) to the rest of the emerging markets,” he added.

Morgan Stanley said he prefers the Brazilian real, the Mexican peso and the Colombian peso, and has entered into credit positions in the South African rand and the Russian ruble.

In credit, Morgan Stanley strengthened his exposure to (buying bonds) South Africa, Brazil, Egypt, Ghana and Ukraine as well as Mexico’s PEMEX.

The past few days have seen the rest of the investors’ appetite for emerging markets as well, as research by Bank of America showed that developing stocks recorded $ 2.7 billion in flows in the week ending last Wednesday.

These flows are the largest in 6 weeks, while emerging market debt funds attracted $ 2.2 billion.

Saving the global economy

In the middle of this month, Kristalina Georgieva, Director-General of the International Monetary Fund, said that vaccinating large numbers of people against Covid-19 disease has become the only hope to save the global economy, which will increase global economic growth by 9 trillion dollars by 2025.

And this month, the World Bank announced that its board of directors approved a $ 12 billion aid plan to ensure developing countries get Covid-19 vaccines quickly when these vaccines become available.

The International Financial Corporation said, in a statement, that this amount will be used to “finance the purchase and distribution of vaccines, tests and treatments for Covid-19 for the citizens of developing countries,” noting that these funds are supposed to be sufficient to vaccinate “up to one billion people.”