Easing bank lending conditions in emerging markets may be the latest sign of improving sentiment in the once-battered sector, experts say.
The composite headline index for emerging market bank lending conditions crossed the key 50-level during the April-June period, a level not seen since the first-quarter of 2013, a survey from the Institute of International Finance (IIF) showed. The 50-level divides easing and tightening territory.
"The easing of lending conditions is a sign of improved sentiment towards emerging markets on hopes that they will recover in the second-half," said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole. "Going forward, this will encourage bankers to view emerging markets more positively."
Emerging market assets have been on a tear following the panic selling that ensued earlier this year amid concerns about the Federal Reserve's planned exit from its quantitative easing program.