JPMorgan cuts forecast for emerging market corporate defaults

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Forecast,Default Rate

Investment bank JPMorgan cut on Monday its forecast of the number of emerging market companies expected to default on their debt, following the biggest...

LONDON - Investment bank JPMorgan cut on Monday its forecast of the number of emerging market companies expected to default on their debt, following the biggest improvement in distressed-level market pricing since 2016.

"We see lower risks for the rest of the year as some of the default candidates rolled off and others already materialized, while new additions were limited," the bank's analysts said in a research note.Problems are expected to stay concentrated in China's property sector and among "repeat defaulters" in the likes of Latin America, although the bank also pointed out that there had not been a Ukrainian default yet this year, despite its war.

This was because more than half the distressed volume is from China, where bond prices are depressed in excess of the actual default risk, they added. The amount Hindenburg Research made from it's short-seller report on Adani Group pales in comparison to the market value it erased.The farm-equipment manufacturer will lay off about 600 employees across three US factories as it shifts production to a newly planned facility in Ramos, Mexico.

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