ValueWalk reports on Sir Michael Hintze’s comments regarding the impact of quantitative easing on emerging markets:
When considering the decline in emerging markets, Sir Michael Hintze, founder of London-based hedge fund CQS, says investors shouldn’t have been surprised...
Hintze clearly stated in 2011 that quantitative easing is “stimulating downtown Mumbai rather than downtown Detroit,” pointing to the often-cited issue. “It is surprising to me that as Taper takes hold, effectively a tightening of money supply growth, the reverse (in emerging markets) is not obvious,” he said in an investor letter reviewed by ValueWalk.
“It is worthwhile remembering that when QE started there were massive capital inflows into Brazil, India and other developing countries,” he wrote. “Conversely, as Taper continues, we believe the magnitude and perhaps velocity of these flows will change.”