New emerging markets index points to developing world-led recovery

HSBC forecasts 6.0% EM growth in 2010

  • By Phil Thornton
  • 06 Oct 2009
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Emerging markets are likely to lead the global economic recovery, the chief executive of HSBC bank said yesterday as he unveiled a new index aimed at tracking the health of fast-growing developing countries.

Michael Geoghegan said that the 13 largest emerging economies had posted the strongest aggregate growth rate over the summer for more than a year. “Emerging markets continue to power growth in the global economy,” he said. “These economies have real dynamism and momentum today compared with some misfiring economies in the West.”

HSBC forecasts that emerging nations will post growth of 6.0% in 2010 compared with an anaemic 1.8% across advanced economies.

Geoghegan, who is CEO of HSBC Holdings plc, said last week that he would relocate from London in February to Hong Kong and become chairman of the Asia business – a move the bank said reaffirmed its commitment to the region.

At this morning’s launch of the HSBC Emerging Markets Index (EMI) on the fringes of the IMF’s annual meetings in Istanbul, the bank said it had compiled data from more than 5000 purchasing managers from 13 countries.

The economies it has picked are: the four BRIC economies – Brazil, Russia, India and China – plus the Czech Republic, Israel, Mexico, Poland, Singapore, South Africa, South Korea, Taiwan and Turkey.

The outperformance of the emerging market sector over the advanced economies has been a theme of the IMF meetings. In its keynote World Economic Outlook, the Fund forecast that the leading emerging and developing economies would grow by 5.1% in 2010, four times the 1.3% expected in industrialised economies.

The regional breakdown revealed that emerging Asian economies would grow by 7.3% next year, close to pre-crisis levels, while the US would post growth of 1.5% and the euro area just 0.3%.

Stephen King, HSBC’s chief economist, said: “Although the US remains the most important trading partner for many emerging nations, its relative importance is declining.”

The HSBC EMI, which is produced using data from the financial information company Markit, surged to 55.3 over the three months to September from 50.7 in the second quarter.

This marks a sharp rebound from the all-time low of 43.8 in the final quarter of last year in the wake of the collapse of Lehman Brothers. Any reading below 50 indicates that output contracted over the quarter.

Stephen Green, group chairman of HSBC Holdings, said the index captured a snapshot of the “economic heartbeat” of emerging markets. “As the world’s economic centre of gravity shifts from West to East, the economic strength of emerging markets will play an increasingly central role. In the development of financial markets,” he said.

Last week Mike Rees, head of wholesale banking at Standard Chartered, an investment bank that also has heavy operations in emerging markets, told Emerging Markets last week that the recovery in Asia and Africa would outpace that in the West. “The world is moving to a different place,” he said.

  • By Phil Thornton
  • 06 Oct 2009

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 27,039.93 106 7.36%
2 Deutsche Bank 25,125.19 81 6.84%
3 Bank of America Merrill Lynch 23,128.33 61 6.29%
4 BNP Paribas 19,315.94 110 5.26%
5 Credit Agricole CIB 18,706.93 106 5.09%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 13,488.13 59 8.47%
2 Citi 11,496.21 73 7.22%
3 UBS 11,302.86 45 7.09%
4 Morgan Stanley 10,864.95 59 6.82%
5 Goldman Sachs 10,434.21 54 6.55%