This year does call for an emerging market outperformance and some dollar weakness, said Caesar Maasry of Goldman Sachs, on Friday.
Speaking in an interview with CNBC-TV18, Maasry said, “Our equity forecast, in general, a bit higher across emerging markets (EMs) than in developed markets (DMs). In fixed income markets, credit, we think has a better return in EMs than in DMs and if the dollar is weakening then EM currencies are probably gaining.”
Latin America and South Asian markets offer good value at this point, he said.
“Asian markets in particular performed very strongly last year especially north Asian markets. So there is probably less catch-up room or upside in those areas and so our focus within EMs has been regional, country-specific one; generally Latin America and Central & Eastern Europe, Middle East and Africa (CEEMEA) perhaps South Asia as well is offering much better value than North Asia.”
However, said Maasry, India is a clear focus for us in the Asian region.
“We are overweight on India on the equity side and looking at the performance since the beginning of last year – Taiwan, Korea, China are up between 30 percent and 50 percent, so well recovered in coronavirus crisis losses of last year. The Indian equity market in dollar terms is up about 10-15 percent, but Latin America and CEEMEA are still down 10-20 percent. So India is a clear focus within the Asia region but it’s a bit more valued broadly in EMs outside of Asia.”
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