Euro zone finance ministers backed a second bailout for Greece of $170 billion yesterday in Brussels, pending a $36.7 billion contribution from the International Monetary Fund. Continued confidence in Greece’s ability to address its debt woes helped boost markets across Europe and Asia during Tuesday trading.
Emerging market funds recorded a tenth week of inflows last week, the longest run since 2010, as investors put global risk (pronounced eurozone crisis) behind them. Despite the continued inflows, the average emerging market equity portfolio lost 3.1 percent as investors took some profits off the table.
Bloomberg prints a fairly negative case for many investors in the emerging markets highlighting the risks to investment in state-controlled companies across the BRIC nations. All global investors should at least be aware of the issues at stake.
Standard & Poor’s has downgraded Greece’s sovereign debt, classifying it as in “selective default” after the Greek parliament last week approved a debt swap in which the country’s creditors would take a 53.5% loss on their Greek sovereign bonds.