Argentina, Brazil and India lead the prospects of an economic recovery, according to Michael Hasenstab of Templeton Global Bond Fund Management.
Templeton, an emerging-market money manager known for making contrarian bets, expects President Mauricio Macri to win re-election next year and continue to pursue policies aimed at limiting inflation, curbing the budget deficit, stabilizing the currency and stoking economic growth, the leading economy news outlet Bloomberg reported Monday.
In Hasenstab's view, Macri's approval rating is holding up fairly well. The analyst sees former President Cristina Fernandez de Kirchner as the other main contender, but with her aura waning down after having been indicted on corruption charges.
“[Macri] remains quite popular considering the country is going into a recession,” Hasenstab said.
“I think that says a lot. It’s because people were so exhausted and frustrated and impoverished by the past regime that they still want change,” he added.
Hasenstab, who oversees the $35 billion Templeton Global Bond Fund, is also optimistic about Brazil's President-elect Jair Bolsonaro and India's Prime Minister Narendra Modi.
Hasenstab has made himself a name out of making big bets on emerging countries, a strategy that has earned him both victories like when he scooped up Irish bonds during the European debt crisis and losses such as Ukraine.
Bloomberg also foresees a good 2019 for Argentina because stocks are less risky than in the United States and thanks to a sell-off this year, $11 trillion of equities are about the cheapest since the financial crisis.
While would-be inverstors might still be too cautious, low valuations and reduced volatility could make the asset class too good to pass up in 2019, according to stock exchange experts.