Archive for the ‘Emerging Markets’ Category
Emerging market indices that have grown in the past 3 months
MarketWatch has a good report on the progress in emerging market indices the past 3 months. While some of the indices have gone up, I would really be careful of some of those countries. While countries like China and to some extent India and Brazil seems a relatively safe long term bet, given their size and demographics, it is not clear how other countries will fare in the crisis of a lifetime. Chile and Israel are stable democracies and good rule of law, but given their smaller size it is not clear if they can face a sizable change in global trade patterns. Argentina and South Korea might get into deeper trouble, based on their fragile financial systems as seen in the recent history.
Here is the the report.
Of the 23 country benchmarks that comprise the widely watched MSCI Emerging Market Index, 14 have outperformed the S&P 500.
Driving this outperformance, investors have bet that economies which rely heavily on exports and commodities are poised to benefit first when the global economy starts to recover.
MSCI EM index, which as of last week had rallied 8% since the S&P 500′s Nov. 21 low, now shows only a 1.5% advance.
The gains since November didn’t come easy, arriving on the heels of steep yearly losses for the markets as the credit crisis tightened its grip and consumer and investor sentiment slid. The Bovespa ended 2008 down 53%, ending five years of consecutive gains. The Shanghai Composite fell 65%, Taiwan’s Taiex dropped 46% and the Merval tumbled 54%.
