2. PURPOSE OF THE SITE: NO OFFER OF SECURITIES; NO ADVICE
The Site is intended to provide an overview of Emso and its products, and is for general information purposes only. The Site is not intended to provide investment, accounting, tax or legal advice. You should consult your own investment, legal and/or tax professionals regarding your specific situation. Users of this Site should be aware that Emso is not acting for, or advising them, and is not responsible for providing them with the protections available under the UK regulatory system. Compensation will not be available from the UK’s Financial Services Compensation Scheme.
Emso makes no representations that materials at this Site are appropriate for use in all locations, or that transactions, securities products, instruments or services discussed at this Site are available or appropriate for sale or use in all jurisdictions, or by all investors or counterparties. Those who access this Site do so at their own initiative, and are responsible for compliance with applicable local laws or regulations.
UNDER NO CIRCUMSTANCES SHOULD ANY MATERIAL AT THIS SITE BE USED OR CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY SECURITIES, ANY OTHER INSTRUMENTS OR INTERESTS OF ANY FUND (DESCRIBED BELOW), WHETHER OR NOT SPONSORED OR MANAGED BY EMSO. IN PARTICULAR, THIS SITE IS NOT INTENDED AS MARKETING OF ANY FUND IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA FOR THE PURPOSES OF THE EU DIRECTIVE 2011/61/EU ON ALTERNATIVE INVESTMENT FUND MANAGERS.
ANY SUCH OFFER OR SOLICITATION CAN AND WILL BE MADE ONLY BY MEANS OF THE PROSPECTUS OR EXPLANATORY MEMORANDUM OF EACH SUCH INVESTMENT FUND OR OTHER APPLICABLE DOCUMENT, ONLY IN JURISDICTIONS IN WHICH SUCH AN OFFER WOULD BE LAWFUL AND ONLY TO INDIVIDUALS WHO MEET THE INVESTOR SUITABILITY AND SOPHISTICATION REQUIREMENTS THAT ARE DETERMINED FROM TIME TO TIME BY EMSO IN ITS SOLE AND ABSOLUTE DISCRETION.
In the United Kingdom, this Site is directed only at persons who are: (i) investment professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("FP Order") or Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 ("CIS Order"); (ii) high net worth companies and certain other entities falling within Article 49 of the FP Order or Article 22 of the CIS Order; or (iii) any other persons to whom such communication may be made in accordance with the relevant provisions of the Financial Conduct Authority's Conduct of Business Sourcebook. It must not be used by, or relied upon, any other persons.
The Content is not intended for the account of U.S. persons (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")) other than persons who are "qualified purchasers" (as defined in the United States Investment Company Act of 1940, as amended) and/or "accredited investors" (as defined in Rule 501(a) under the Securities Act).
3. NATURE OF THE CONTENT
While Emso uses reasonable efforts to obtain information from reliable sources, Emso makes no representations or warranties as to the accuracy, reliability, or completeness of any Content at this Site. Opinions and any other Content are subject to change without notice. Emso is not utilizing this Site to provide investment or other advice to you or any other party, and no information or material at this Site is to be relied upon for the purpose of making or communicating investment or other decisions.
All materials on this Site are meant to be reviewed in their entirety, including any footnotes, legal disclaimers, restrictions, or disclosures, and any copyright or proprietary notices. Any disclaimers, restrictions, disclosure, or hedge clauses apply to any partial document or material in the same manner as they do the whole, and will be deemed incorporated in the portion of any material or document that you consult or download.
4. SUMMARY OF RISK FACTORS
Investments in hedge funds and other investment funds, including those managed by Emso and such funds' investments in any other funds (collectively, the "Funds" or “Advisory Clients”), are speculative and involve a high degree of risk and are intended only for experienced and sophisticated investors. Investment in a Fund may expose an investor to a significant risk of losing all of the property or other assets invested. There are unique risks involved when investing in a particular Advisory Client. You should carefully review each Advisory Client’s offering materials and related information for specific risk and other information before investing. This Site does not list, and does not purport to list, the risk factors associated with an investment in any of the Advisory Clients.
5. USER IDENTIFICATION CODES AND PASSWORDS
Portions of the Site are password-protected and are accessible only to users who have been issued passwords by an authorized representative of Emso and who meet the applicable investor suitability, experience and sophistication requirements. Password-protected portions of the Site may contain performance information for the Advisory Clients sponsored or managed by Emso. Users of the password-protected portion of the Site acknowledge that past performance is not necessarily indicative of future results. Do not enter the password-protected portion of the Site through use of your User I.D. and password unless the terms and conditions of this Agreement are acceptable to you. You may not obtain or attempt to obtain unauthorized access to such parts of our Site, or to any other protected materials or information, through any means not intentionally made available by Emso for your specific use. If you are issued a password, you agree that you will treat and maintain this information confidentially and will not permit others to sign onto the Site through the use of the User I.D. and Password assigned to you. You accept full responsibility for any use of your Password, and will notify us immediately of any actual or suspected unauthorized use of your Password. The User I.D. and Password are personal for your use only, and any violation of the terms of this Agreement shall permit Emso to immediately suspend or terminate your further access to the Site.
6. CONFIDENTIALITY, INTELLECTUAL PROPERTY RIGHTS
Emso owns and maintains this Site. The Content is the intellectual property of Emso. Nothing at this Site shall be construed as granting by implication, estoppel, or otherwise any license or right to use any of the Content of the Site. No act of downloading or otherwise copying from this Site will transfer title to any software or material at this Site to you. Anything that you transmit to this Site becomes the property of Emso, may be used by Emso for any lawful purpose, and is further subject to disclosure as deemed appropriate by Emso including to any legal or regulatory authority to which Emso is subject. Emso reserves all rights with respect to copyrights, service mark, and trademark ownership of all Content, names, logos or identifying marks relating to products or services of Emso at this Site and will enforce such rights to the full extent of the law.
Unless information contained on the Site is otherwise public information, all Content contained on the Site is considered to be confidential information (including the Site's features, functions, options, tools, capabilities, format, and layout, etc.), and you agree not to copy, republish, or redistribute any of the Content or disclose the same to any third parties unless and only to the extent Emso has given you written permission to do so.
We may collect personal information about you through: (i) your completion of registration or subscription forms or as otherwise provided by you through this Site; and (ii) information you provide relating to your transactions with Emso or its Advisory Clients. We may also collect information about your visits to this Site through use of Internet “cookies” (an information collecting device from a web server) as described further below. By browsing this Site, you agree to Emso's use of such cookies.
We may use such personal information for the purposes of administering the relationship between us, marketing of products and services, monitoring and analysing our activities, and complying with any legal or regulatory requirements. We may transfer the personal data we hold about you or individuals associated with you to any country, including countries outside the European Economic Area, for any of the purposes described above. We may also transfer your personal information to a third party to whom we transfer any of our rights or obligations under any agreement, or who acquires an interest in any of Emso’s assets, or in connection with a sale of its shares or the merger or consolidation or other transfer of the assets of Emso, whether voluntarily or by operation of law, to such third party, or who is otherwise deemed to be a successor or transferee. We may disclose any personal information if we are required to, requested, or permitted to do so, by a court of law, by any governmental, regulatory or law enforcement agency, including the police, or in connection with legal proceedings or where required by our website internet service provider. We may also disclose any personal information if we determine it is necessary or desirable to comply with any law or to protect or defend our rights or property.
Although we will do our best to protect your personal information, we cannot guarantee the security of your data transmitted through this Site. Any transmission of data is at your own risk.
We may send text files (e.g., “cookies” or other cached files) or images to your web browser to store information on your computer. Such text files and images are used for technical convenience to store information on your computer. For instance, we may use a session cookie to store form information that you have entered so that you do not have to enter such information again. We may use information stored in such text files and images to customize your experience on this Site and to monitor use of this Site. You may set your browser to notify you when you receive a cookie. Many web browsers allow you to block cookies. If you do block cookies you may not be able to access certain parts of this Site. You can disable cookies from your computer system by following the instructions on your browser or at www.allaboutcookies.org.
You may have certain rights under applicable data protection laws which may include the right for you to receive a copy of the personal information we hold about you. For a copy of your personal information please write to us at the address provided below. We may charge you a nominal fee for complying with such a request in accordance with applicable law. In addition, you may have a right to request personal data provided on this Site is corrected, blocked or deleted if the data is factually incorrect, incomplete or irrelevant for the purposes described in these terms and conditions.
If you have any questions about the use of personal information, please contact email@example.com.
The Site is operated by Emso on an "AS IS," "AS AVAILABLE" basis, without representations or warranties of any kind. EMSO DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THIS SITE AND ITS CONTENT, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF TITLE, MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. Without limiting the foregoing, Emso does not represent or warrant that the Content on the Site is accurate, reliable, complete, or current, or that the Site will operate without interruption or error. Emso makes reasonable efforts to avoid technological problems, but at any time the Site may have and may cause problems, such as viruses or other harmful components. Emso shall not be liable for any action you take or any decision you make in reliance on the Site. Some jurisdictions do not allow the disclaimer of implied warranties, so the foregoing disclaimer may not apply to you.
You acknowledge that you are aware that by using this Site you may be subject to security and privacy exploitations, including, eavesdropping, sniffing, spoofing, hacking, breaking passwords, harassment, exposure to objectionable material, posturing, and/or other security or privacy hazards.
9. LIMITATION OF LIABILITY
Under no circumstances, shall Emso and its affiliates or any of their employees, directors, officers, agents, vendors or suppliers be liable for any direct or indirect losses or damages arising out of or in connection with the use of or inability to use the Site. This is a comprehensive limitation of liability that applies to all losses and damages of any kind (whether general, special, consequential, incidental, exemplary, or otherwise, including, without limitation, loss of data, income or profits), whether by statute, law or in contract, negligence, or other tortuous action, even if an authorized representative of Emso or its affiliates has been advised or should have known of the possibility of such damages. Applicable law may not allow the limitation of liability set forth above, so this limitation of liability may not apply to you. In no event shall the total liability of Emso or any of its affiliates for any and all damages and causes of action exceed the amount paid by you, if any, for the use of this Site.
10. NO ENDORSEMENTS
References on the Site to any names, marks, products or services of third parties or hypertext links to third party sites or information do not constitute or imply an endorsement, sponsorship, or recommendation of the third party, information, product or service by Emso. Emso and its affiliates do not endorse or make any warranties or representations about any site you may access through the Site. Any links to other sites are provided for convenience only. If you access any third party web site through the Site or otherwise, you do so at your own risk.
11. MONITORING THE SITE
Emso reserves the right to monitor and record activity on the Site at its sole discretion, and may report any activity that it suspects may violate any law or regulation as it deems appropriate.
This Agreement (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales.
The mood on the sidelines of the IMF Spring Meetings in Washington, D.C. was decidedly more upbeat than last October as several of the headwinds that challenged the emerging market asset class last year have faded and turned into potential tailwinds. The US Federal Reserve (FED) is expected to let the economy run hot again, EM growth is seen as potentially on the mend as more signs accumulate to indicate that China’s growth troughed in the first quarter of 2019, and global policy uncertainties on trade and Brexit have been, for the most part, fading. There is, however, less certainty on the future direction of the US dollar until and unless we see a firmer recovery in Europe. While the current set-up is broadly supportive for EM, the bottom-up story is not uniformly compelling, therefore, requiring a higher degree of caution when selecting assets. In credit, where valuations are less compelling following a significant rally in US Treasuries (UST) that we feel has run its course, we believe that the upside will largely need to come from the cheaper-looking credits in high yield
We feel that the top-down macro backdrop has become more constructive for EM, in line with our “What to expect in 2019” feature, which was published in December 2018. US growth has been moderating while still above potential, inflationary pressures in the US have been subdued, the FED is likely to be on hold for the rest of the year, and the likely switch to an alternative average inflation targeting framework over the next 6-12 months establishes a high hurdle to resume rate hikes. Growth concerns in EM have, in our view, somewhat receded now that China’s growth slowdown is bottoming, with increasing evidence that the lagged impact of China’s past monetary stimulus has resulted in a credit rebound while recent fiscal stimulus measures should likely help the recovery gain traction over the next two quarters. The size of the stimulus is smaller than in 2015 and 2016 and more inward looking. While we believe that the supply-demand imbalances in the property sector will slow down any upward momentum over the medium-term, removing China as a drag for the more open economies of Asia and Europe is already a significant positive.
Policy uncertainties related to trade and Brexit have also been, for the most part, fading. The US and China have made some headway towards resolving their trade differences, although they seem to have hit an impasse as they get closer to finalizing terms that we think could introduce some near-term volatility. We believe that the US is also unlikely to impose broad tariffs on imports of autos, despite recent threats to do so, and will instead use it as leverage in trade negotiations with Europe. The threat of a disorderly hard Brexit, which could be disruptive to a European recovery, has also diminished recently after the majority of MPs ruled out that possibility, and the UK government agreed to participate in European Parliamentary elections to secure an extension of negotiations until the end of October.
There is, however, less certainty on the future direction of the US dollar, with a growth slowdown and dovish FED on the one hand, and the continued lagging recovery in Europe and higher carry compared to other G10 currencies on the other. Until the European recovery gathers further steam, we believe that the uncertainty over the US dollar is likely to continue to be a relative challenge for EM. European growth appears to have bottomed out thanks to a robust labor market, loose fiscal policy, and easy financial conditions, but it will be critical to see if reduced global trade policy uncertainties can help the manufacturing sector recover and allow for a broader lift-off.
While the current top-down macro backdrop is broadly supportive for EM, the bottom-up perspective is seen as more challenging and differentiated, making it imperative to be careful when selecting assets. In credit, we see valuations as generally already fair to even slightly rich after a significant tightening in spreads on the back of a UST rally that we feel has already run its course. While we are comfortable collecting carry in select oil-exposed, fundamentally sound credits, we believe that the upside will largely need to come from cheaper-looking credits elsewhere.
In Argentina, the prospect of an increasingly tight three-way election has weighed on assets where positioning was already crowded, though at this point we estimate that the market is slightly overpricing the possibility of former President Cristina Fernández de Kirchner coming back to office. Meanwhile. in Turkey, near-term prospects appear more challenging after President Recep Tayyip Erdogan decided to force a re-election in Istanbul on June 23 that will further postpone a return to the deleveraging policies of the fourth quarter of last year.
In local rates and FX, we continue to look for idiosyncratic opportunities and currently favor select rate receivers. Running yields in Egypt continue to be potentially attractive thanks to the prospect of a further cut following the 100 basis points rate cut last February, Egypt’s improved external position and foreign inflows have allowed the banking sector’s net foreign asset deficit to move back into balance. Running yields in Nigeria are not quite as attractive, however, we believe that FX risk is lower than in Egypt given recently re-elected President Muhammadu Buhari’s preference for continuing to run a relatively fixed FX regime. The Central Bank of Nigeria typically only allows a significant FX realignment if external factors, such as the sharp decline in oil prices in 2014 and 2016, put heavy pressure on the balance of payments. This is clearly not the case today, and we foresee limited to no adjustments unless Brent oil prices were to fall sustainably below USD 50 per barrel.
We think that Brazil and Mexican markets could potentially offer opportunities. In Brazil, our base case remains that the approval of the social security reform bill towards the end of the third quarter of 2019 could help anchor Brazil’s fiscal dynamics for the best part of the next decade. Coupled with subpar growth, subdued inflation, and a high unemployment rate, we believe that this should likely provide reasonable justification for the Central Bank to either cut rates or remain at current rates for far longer than the market expects. In Mexico, disappointing growth, the prospect of inflation falling within the 2% to 4% band in the second half of the year, and a so far disciplined fiscal stance should also prompt the Central Bank to begin a deeper rate cutting cycle in the second half of the year than what we believe is currently priced by markets.