Franklin Templeton's Hasenstab: Fed hike to widen EM divergence

[December 08, 2015]  LONDON (Reuters) - A possible U.S. interest rate hike will magnify differences between emerging economies with concerns over South Korea, Mexico and Malaysia to abate thanks to their resilience, said Franklin Templeton's star bond investor Michael Hasenstab.

Hasenstab, CIO, Templeton Global Macro, said countries such as Mexico, were in a better position to raise interest rates along or shortly after the U.S. Federal Reserve, thanks to their relatively strong fundamentals.

"However, countries with relatively weaker fundamentals, such as Turkey and South Africa, are likely to be negatively impacted by US interest-rate hikes," Hasenstab said in an emailed statement.

Hasenstab said added his funds were positioned for rising U.S. Treasury yields as well as currency appreciation in select emerging markets, and expected a continued depreciation of the euro and the yen.

(Reporting by Karin Strohecker, editing by Mike Dolan)

[© 2015 Thomson Reuters. All rights reserved.]

Copyright 2015 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.