Economics: PODCAST|Key Takeaways: 2026 Emerging and Frontier Markets Opportunities Conference

SPEAKER_1 (0:09)

Welcome to JPMorgan's At Any Rate podcast series. In this episode, we will be recapping JPMorgan's 13th Emerging & Frontier Markets Conference, its standout attendees, and the key themes that were explored and brought to light.

Now for your hosts, Zafar Nazim, our Global Head of Emerging Markets Corporate Research, and Ayom Mejabi, our Senior Economist for Sub-Saharan Africa.

Zafar Nazim (0:36)

Hello, everyone. My name is Zafar Nazim. I head Emerging Markets Corporate Research at JPMorgan. I'm based in London and I'm here to talk about the recently concluded Emerging & Frontier Markets Conference. This is the 13th year of our hosting this conference. This was the largest conference that we have organized so far. In this year's conference, we had 129 corporates, 20 sovereigns, and roughly 840 investors, which is our 5% over last year. I would specifically like to mention the sovereign participation in this conference. This number went up from 14 sovereigns last year to 20 this year. Of these, 20, 15 were frontier sovereigns. Just three years back, we only had four sovereigns attend this conference.

The conference itself took place in a very unusual backdrop. We had, you know, 10 years' treasuries to touch 5%.

Oil was trading over $105 per barrel. We had two wars going on. The Middle Eastern war escalated again. And the Russia-Ukraine conflict had worsened, if anything. But that said, the global economy and, in particular, emerging economies were looking quite healthy in terms of fundamentals. Corporate fundamentals were also quite strong. As a result, financial markets were still quite robust. Spreads in our market were at all-time tights.

And equity markets are also doing quite well. So with this backdrop in place, investors in general did not have a high level of conviction certainty as to where things can go, because the macro was giving conflicting signals, and valuations were looking quite stretched. And we ran this survey at the conference to get an idea about where investors were in terms of sentiment. And the conclusions were, well, valuation was stretched. Investors were not thrilled, but they continued to remain invested given the rather healthy fundamentals. In general, investors were looking to add mostly on the front end of the curve as far as their investments were concerned. There was still a lot of demand for frontier market opportunities given the high carry in those markets.

And investors are also on the lookout for opportunities which are lower on beta and higher on alpha. With that, let me turn over to my colleague, Ayomide Mejabi, who looks after frontier markets on the strategy side. And Ayomide can perhaps add some color on what he thought about the conference and any views that he got from investors.

Ayomide Mejabi (3:06)

Sure, Zafar. Thanks for having me. Like you mentioned, interest in frontier markets continue to grow at these conferences. You rightly suggested and showed that we had about 20 sovereigns. I'll say most of them were frontier market sovereigns. The conference held at the time that coincided with JPMorgan index team launching the GBI EM Edge index, which is an index that includes about 26 frontier countries into an index, which is supposed to help investors track and eventually invest in these smaller markets in emerging markets. It also has a very wide geographical diversity across Africa, Central Asia, but also South Asia and Latin America. In terms of takeaways from the conference, I'll say interest continues to be strong in frontier.

Many of our investors agreed that frontier markets have come into this year and should continue to see strong external balances.

Central banks and policymakers seem to be more proactive in their implementing reforms, especially on exchange rate reforms, allowing exchange rates to be a shock absorber to external shocks. However, inflation remains a challenge, and this is mostly due to the energy shock. Even then, there was general consensus that frontier markets have also been quicker to adjust things like petrol prices, electricity prices, and the likes, but inflation remains a challenge for these countries. Also, in terms of challenges, like you mentioned, Zafar, the backdrop is a bit challenging. We held the conference just as the Fed kicked up its hike. There's still a question about the direction of the dollar. We have a few frontier economies that are challenging themselves on their debt sustainability, in terms of special situations, and then finally positioning. These countries have become less frontier these days, relative to four or five years ago. So there's been increased investor positioning in these countries, and this potentially could be a risk that investors will have to look out for if the global backdrop continues to move in an adverse scenario. So at this point, talk about risks and the macro backdrop is a good point to bring in our colleague Nicolae Alexandru to talk about the macro takeaways from the conference.