— This is the script of CNBC's news report for China's CCTV on August 29, Thursday.
Global headwinds like capital outflows have taken the wind out of emerging markets.
Philippine shares reversed sharp losses from earlier in the week, after data showed a better-than-expected rise in Q2 GDP. But could other EM markets still be at risk of more outflows?
Here's what some analyst told us.
[Sound on tape by Herald Van Der Linde, Head of Equity Strategy, Asia-Pacific, HSBC: I think at the moment, a lot of what we've seen so far is a currency mkt phenom. The outflows in equity mkts have been muted. YTD, we still see inflows of about $3bn to Asia, despite the sell-offs that we've seen in the last couple of weeks. The equity mkts actually have not seen as much outflows as some of the XE mkts.
Nick Verdi, Director, FX Strategy Asia Pacific ex-Japan, Barclays: Our central view is that we stick into the 60s for USD/INR, but at this stage when currencies are moving lower by a big figure by the day, it's v diff to call a low. And that's what mkt participants are struggling with. In the INR mkt, there are v few pple out there who are selling USDs right now.
Hartmut Issel, Head of CIO Wealth Management Research, APAC, UBS: India sits on one of the largest coal reserves in the world but not functioning, you dont need big reforms, it's been there before. You dont need to go thru parliament. If you manage to do that, you'd automatically cut the current account deficit and you gold starts to recover.
Indonesia, perhaps structurally, cyclically I think they're in worse shape. Because finally now with the new BI governor, they reacted to reality but the thing is they let the economy overheat and therefore let imports overheat at a time where everybody around them cooled off.]
Up until a few months ago, India was regarded as one of Asia's powerhouses. But the plunge in the Rupee has massively shifted market sentiment. CNBC's Seema Mody looks at whether India can reclaim its crown.
[Slowing growth, and rising inflation and are just some of the challenges facing India which was once touted the hot emerging market. These factors have led to a rapid depreciation in the Indian rupee, which is down better than 20% since May. It just hit an all-time low. What's more? The Sensex has been under a significant amount of pressure as foreign investors take money out of India.
Experts say complacency during a time when the central government should have been Implementing new policies that promote economic reform, is partly to blame. Although political gurus on the ground will tell you that it is unrealistic to expect the government to make any dramatic changes to its policy ahead of India's general election next year.What's worrisome is that if the situation worsens, India may have no choice but to entertain the idea of the IMF potentially intervening, something that hasn't happened since 1991.]
Brazil's central bank gives its currency, the real a boost. As widely expected, it raised rates by 50 basis points, taking the SELIC rate to 9%. CNBC's Carolina Cimenti takes a look the impact of potential Fed tapering on the Brazilian real.
[Here in Brazil bets on Fed tapering have led to capital flight that has seen our currency weaken by about 20% against the dollar so far this year. Aggressive rate rises by the central bank have done little to stem the weaknesses and actually threatens to fuel already high inflation. The government is trying to please neverous investors saying it has several weapons to fight the FED bullet's fatality. But you have to remember Presidential election are just around the corner and over 13 months away. And recent civil unrest proves people here takes the real in their pocket very seriously. So let's hope next year's soccer world cup and the 2016 Olympics can brighten the mood in LatAm's largest econ.
For CNBC Business News, I'm Carolina Cimenti in Rio de Janeiro.]
Li Sixuan, CNBC.