financetom
Market
financetom
/
Market
/
The stars are well aligned for emerging markets
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
The stars are well aligned for emerging markets
Nov 21, 2023 11:56 AM

Emerging markets are poised for growth, buoyed by favourable interest rates, a stable US dollar, and beneficial oil prices, per Mark Matthews of Bank Julius Baer & Co.

Share Market Live

NSE

Matthews pointed out that Korea and Taiwan currently feature among emerging markets but they should be classified as developed markets. In fact, he believes Korea will be added to the MSCI’s developed market index and taken out of emerging next year. But excluding Korea and Taiwan, he noted, "the really big two we all know are China and India.”

Matthews expressed concerns about the Chinese economy.“The momentum is bad. The October numbers show particularly worrying signs in the property sector, property prices, property sales, and new construction starts were all significantly worse than even poor expectations."

And so, in the absence of a compelling reason to invest in China, he believes there's only India. Nobody's going to buy Russia and while some investors might look at Brazil, it is far away and hard to understand, he noted, adding that the remaining are very small markets like Southeast Asia and the rest of Latin America.

Drawing parallels between China and India, Matthews said that both countries have price-to-earnings (PE) ratios that are in line with long-term averages, suggesting a level of stability in valuations.

Talking further about India, he said, “No change in our view. We like it, the price-earnings ratio is bang in line with the long-term average at about 19 times forward earnings and high teens, possibly even low 20s earnings growth, depending on what the oil price does. So why not be in India and we are.”

Also Read

| JPMorgan to add Indian bonds to its emerging markets index from June 2024

Other global market experts have also been highlighting the attractiveness of India within the emerging markets landscape.

In an exclusive chat with CNBC-TV18 in September, veteran investor Mark Mobius, who manages nearly $300 million across various countries, said that global investors who intend to invest in Emerging Markets, have India as the main option.

Often regarded as the founder of Emerging Market investing, Mobius said that his exposure to India was (as of September 27) at 20%, at least double the 5-10% exposure he historically had.

The next in line was Taiwan, but due to challenges arising from issues with both China and the United States, there were no plans to significantly increase exposure there. Korea was also on their list, along with smaller positions in Thailand and Turkey, the latter being a very minimal allocation.

"Therefore, India remains the primary focus with the most significant weightage in the portfolio," he said.

Also Read | India has delivered more multibaggers than any other emerging market

According to Cameron Brandt, Director of Research at EPFR Global, promising economic prospects, political stability and strong growth potential help a notable bias in favour of emerging Asian markets in the global investment landscape.

Also Read | Mark Mobius to step back from Mobius Capital Partners, plans to work on new projects in Dubai

India's allocation in global portfolios remains stable, consistently ranging from 8% to 10% of the average portfolio. This steady allocation reflects the confidence that international investors have in India's potential and its ability to weather economic challenges, Brandt told CNBC-TV18 in October.

For more details, watch the accompanying video

Also, catch all the live updates on markets with CNBC-TV18.com's blog

First Published:Nov 21, 2023 8:56 PM IST

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Crude Oil Prices Mostly Unchanged as Market Weighs Winter Demand Against Higher U.S. Fuel Stocks
Crude Oil Prices Mostly Unchanged as Market Weighs Winter Demand Against Higher U.S. Fuel Stocks
Jan 9, 2025
05:07 AM EST, 01/09/2025 (MT Newswires) -- Crude oil prices held steady early Thursday as investors weighed winter fuel demand outlook against large additions to U.S. fuel inventories. Brent crude edged 1% lower to US$76.12 per barrel and West Texas Intermediate crude lost 0.2% to US$73.17/b at last look. JPMorgan analysts said January oil demand is expected to rise by...
U.S. Crude Oil Stocks Fall 1 Million Barrels in Week Ended Jan. 3, EIA Reports
U.S. Crude Oil Stocks Fall 1 Million Barrels in Week Ended Jan. 3, EIA Reports
Jan 9, 2025
05:43 AM EST, 01/09/2025 (MT Newswires) -- U.S. crude oil inventories fell 1 million barrels to 414.6 million barrels in the week ended Jan. 3, the U.S. Energy Information Administration said in its This Week in Petroleum report released Wednesday. Crude oil production edged 17,000 barrels per day (b/d) lower to 13.58 million b/d week-over-week, the EIA reported. Crude oil...
Canada-US Government Bond Spreads Are Bracing for Impact, Says BMO
Canada-US Government Bond Spreads Are Bracing for Impact, Says BMO
Jan 9, 2025
07:00 AM EST, 01/09/2025 (MT Newswires) -- Relative to the United States, Canadian long-term interest rates have been turned on their head, said Bank of Montreal (BMO). In the decades before the late 1990s, Canadian long-term bond yields were typically one percentage point above their US counterpart, or even higher, noted the bank. That all changed after Canada got its...
US Dollar Rises Early Thursday Ahead of Light Data Schedule, Fed Appearances
US Dollar Rises Early Thursday Ahead of Light Data Schedule, Fed Appearances
Jan 9, 2025
08:11 AM EST, 01/09/2025 (MT Newswires) -- The US dollar rose against its major trading partners early Thursday before a light data schedule but a busy day of appearances by Federal Reserve officials. The US Government and stock markets are closed for the National Day of Mourning for the funeral of former President Jimmy Carter. Outplacement firm Challenger, Gray &...
Copyright 2023-2025 - www.financetom.com All Rights Reserved