How to Cover Emerging Markets

By Julia Leite
Columbia Journalism School C’12

When the financial crisis triggered a recession that left the major global markets stuck in neutral, more investors and investing professionals turned to emerging markets to keep their portfolios growing (or afloat). As inflows into emerging markets equity funds soared to record highs, millions of workers whose retirement funds had grown slowly with old, familiar companies like IBM and Ford suddenly had a stake in stocks and bonds listed in places like Brazil, China, India and Russia. Demand for news about these markets jumped – and has remained healthy – but covering them presents some challenges.

Writing about emerging markets requires not only a familiarity with a new set of companies, but also a unique skill set: fluency in foreign currencies and interest rates, an awareness of international politics and three or four internal clocks.

I have been covering emerging markets at Bloomberg News for about three months, and prior to that, I had written about Brazilian stocks for two years in Sao Paulo. I am still learning the subtleties of the beat. It has not been easy, but there are a few strategies new reporters can use to get a handle on these markets quickly and report the stories that matter most.

Map your market.

The U.S. market is efficiently diversified. A bad day in tech can be offset by a good day in energy. However, some of the biggest emerging markets, like Brazil and Russia, are heavily weighted towards commodities, making them more volatile as raw material prices swing.

Reporters covering stock markets should look at the composition of the major indexes there. Which companies are weighted the most? What drives their ups and downs? Broad moves will be easier to explain if you know which companies wield the most influence.

State-owned companies tend to make up a large share of emerging markets, making the broader indices susceptible to government intervention and macroeconomic news. Read up on how recent government actions have impacted businesses. Which sectors have the government been stoking or cooling, and which ones are on deck?

Get help building sources.

Reporters covering emerging markets from the U.S. or the U.K. will quickly become aware of just how far away some of them are. The distances and time differences can make it hard to get local sources on the phone or attend events to meet new ones.

To set up an early stable of sources, ask local reporters for their most reliable people. Then sift through some recent stories on your beat; even if they’re in another language, you can track down names of potential sources.

Reach out to foreign investors, too. Fund managers living in the U.S. often have different perspectives on companies than local sources.

Get your timing down.

Covering different countries can mean coping with several time zones. Some of the best sources on Asia are based there or in Europe, at least a few hours ahead of the U.S. Reporters based in New York must do the bulk of their reporting in either the early morning or late evening. Last-minute interviews can be harder to book because sources are more likely to be asleep when you’re trying to reach them.

Try to send emails to potential stories a day ahead so they’ll have a chance to read them before they leave or before you get in.

And build sources all over the world – Asia, Europe, Latin America, New York and Los Angeles or San Francisco – to ensure you’ll have someone to call if news breaks unexpectedly.

Compare apples to apples.

Information isn’t uniform across the world’s markets and governments. Each country has its own legal quirks governing corporate disclosures and its own ways of measuring economic data.

Be prepared to be flexible. Sometimes, the economic indicator or historical data you’re looking for isn’t accurate – or it just doesn’t exist. For example, Argentina’s official inflation data has been criticized by the International Monetary Fund for its poor quality.

Watch your currencies.

When comparing price data across countries, make sure they’re in the same currency. Saying outflows from Brazilian mutual funds totaled 1 billion reais while outflows from Russian funds totaled 1 billion rubles isn’t useful to most readers, so do the conversions for them. Some publications prefer to use U.S. dollars for all comparisons.

When converting currencies, remember to use the same dates for all exchange rates.  Central banks’ websites will usually publish daily currency quotes, as will some exchanges. And there are plenty of currency conversion tools online. Just make sure to use the same ones consistently and cite your sources.

Mind the language barriers.

Financial and economic information is also not always published in English. Reporters covering a market whose language they don’t speak should get familiar with a few key words and phrases to help them save time avoid wild goose chases.

Ask for a native speaker’s help to make sure nothing is lost in translation. Online translation tools can be helpful to get a general idea of what a release says, but they should never be used to generate a final translation for publication.

Earnings documents and statements regarding the market usually list the name of the main investor relations or press contact. If you aren’t sure what you’re looking at, call or email the company and ask for the material in English.

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