2022 Themes

2021 saw the drivers of the post-Covid world begin to emerge; successful new business models, shifting politics and changing patterns of investing. There are new opportunities favouring countries, companies and sectors with the adaptability to succeed, and risks for those who don’t.

While the initial tantrum has seemingly been avoided, the focus will now shift towards the timing and pace of DM rate hikes, which will present another potential opportunity for EM assets, especially those denominated in local currency, to throw a “tightening tantrum” as we move into 2022.

After a 40-year bull market in bonds, it looks like the tide may finally be turning. The world’s biggest central banks are scaling down their bond purchases while emerging market central banks have already pulled the trigger on rate hikes. And the recent pick-up in inflation may not be as transitory as initially imagined.

COP26 showed many people and firms want to make better climate choices, even without a strong global climate framework. ESG funds promise ethical investing, but their complexity and opacity make them poor (and expensive) choices for many. Climate-based funds will be the default ethical choice, supported by new US pension rules, with ESG a high-end niche.

Ageing population, new technologies outside its control, corporates with monopoly power, systemic financial stress, competition with the US and celebrity entrepreneurs are all threats to the power of the Communist Party of China (CCP) and President Xi Jinping. These factors have all contributed to the regulatory crackdown in the technology, education, gaming and real estate sectors seen in 2021.

Food prices are at their highest level in a decade and the rally could persist through 2022. But investors are becoming increasingly averse to industries that violate ESG principles, such as palm oil. ESG-compliant portfolio construction will be increasingly demanded.

Blockchain’s main use to date has been in the US$2.5trn cryptocurrencies’ sector. New currencies with enhanced blockchain functionality are being launched continually and many emerging market consumers are enthusiastic converts. But blockchain could conceivably have a much more profound impact in other areas.

Crypto is following the well-trodden path of other disruptive technologies such as automobiles and the internet, whereby the rapid evolution of its pre-existing infrastructure is creating opportunities for previously unthought-of applications – a pro...

Individuals in emerging markets could be some of the biggest beneficiaries of this asset class. But many mainstream investors remain wary, with concerns including the energy-intensive nature of some cryptocurrencies, and their use by criminal elements.

In 2021, several central banks have made strides in developing their digital currencies. But it is emerging and frontier countries that seem to be leading the charge, rather than their developed counterparts.

Satellite internet (internet infrastructure in space) is wireless internet provided via communication satellites orbiting around the earth. OneWeb – which plans to service businesses, government and maritime industries – has launched over 200 satelli...

The penetration of consumer credit in emerging markets is far lower than in developed markets, but this is set to change with the emergence of innovative Buy Now Pay Later (BNPL) fintechs. We expect to see more interest from global BNPL giants in the...