The link between emerging market companies' earnings and GDP growth is tenuous. We explain why investors are better off focusing on fundamental analysis of individual companies.
Global Market Perspective
Small caps, global liquidity, and seven-year returns are among the topics in the spotlight in the latest economic and asset allocation views covering Q4 2017.
In this in-depth Q&A, our panel of experts discuss the outlook for emerging market assets, from both a bonds and equities point of view.
As expected, the Reserve Bank of India (RBI) left rates unchanged at 5.75%, with concerns over both slowing growth and rising inflation present. There seems little chance of further easing this year.
We have downgraded most of the BRIC economies as idiosyncratic stories deteriorate. China escapes unscathed, with a slowdown still expected later this year after a strong first quarter, as tighter policy bites.
Some readers will be aware of our thoughts on China and its credit-fuelled investment bubble. But it’s not all doom-and-gloom in Asia, with India a case in point.
Although it is good news that latest GDP data has surpassed expectations, it might imply that the demonetisation policy has been a failure.
Economic and Strategy Viewpoint
This month our economists focus on the inflationary headwind to the global recovery, become cautiously more optimistic on Europe, and explain their more positive view on emerging markets.