{"id":313573,"date":"2010-02-12T11:24:00","date_gmt":"2010-02-12T16:24:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:395245"},"modified":"2010-02-12T11:24:00","modified_gmt":"2010-02-12T16:24:00","slug":"emerging-markets-underperformance-is-temporary","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/313573","title":{"rendered":"Emerging markets underperformance is temporary"},"content":{"rendered":"

The recent underperformance of emerging markets to developed markets is temporary, says Capital Economics.<\/p>\n

"Emerging market equities have often underperformed developed market equities during previous periods when markets have moved down, said James Lord and John Higgins, economists at the U.K. research firm.   <\/p>\n

"Nonetheless, we would point out that the underperformance this time around has been very small, and the time frame short. We also think that it will not last for long."<\/p>\n

The MSCI Emerging Markets Index has dropped as much as 15% so far this year, versus 8% for the S&P 500 and 13% for the MSCI EAFE index, as global equities pull back from last year's rally on a slew of concerns, including policy tightening in China and Greece's sovereign debt crisis. <\/p>\n

Although history shows there is risk that further weakness in developed markets will result in further underperformance of emerging markets, Mr. Lord and Mr. Higgins said it is far from automatic. <\/p>\n

They argued that prospects for economic growth in much of the emerging world remain more favourable than in the developed world. <\/p>\n

"Admittedly, this is not proving to be such good news in the short term \u2013 the strength of the recovery has led several central banks in the developing world to start tightening monetary policy, which has probably contributed to recent stock market weakness," the economists said. <\/p>\n

"Market fears over what damage policy tightening might do should not last for much longer." <\/p>\n

Secondly, Mr. Lord and Mr. Higgins said that public finances in emerging markets are relatively sound compared to developed markets, which puts less pressure on bond yields to rise in the developing world. <\/p>\n

David Pett<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The recent underperformance of emerging markets to developed markets is temporary, says Capital Economics. "Emerging market equities have often underperformed developed market equities during previous periods when markets have moved down, said James Lord and John Higgins, economists at the U.K. research firm.   "Nonetheless, we would point out that the underperformance this time around […]<\/p>\n","protected":false},"author":4060,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-313573","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/313573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4060"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=313573"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/313573\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=313573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=313573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=313573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}