Where the Buys Are
Emerging markets are cheaper than their developed counterparts with far more growth. Earnings for the MSCI Emerging Markets index are expected to grow at 15% over the long term, versus 12% for MSCI World index.
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| Recent | Change | P/E** | 2011** | |||
Market | Index | Level | YTD | 1-Yr | 3-Yr* | 2011 | 2012 | Price/Book |
Brazil | Bovespa | 52,482.82 | -23.30% | -21.40% | -0.10% | 8.6 | 7.6 | 1.2 |
Comments: Latin America’s economic dynamo selling at relatively low valuation. | ||||||||
China | Shanghai | 2,534.36 | -8.9 | -4 | 5.1 | 11.7 | 9.7 | 1.8 |
Comments: Concerns of hard-landing for economy could be priced into stocks. | ||||||||
Russia | RTS | 1,535.72 | -10.5 | 8.6 | -2.4 | 5 | 4.7 | 0.9 |
Comments: Should benefit if oil stabilizes, and very cheap. | ||||||||
South Korea | Kospi | 1,744.88 | -9.3 | 5.6 | 7.4 | 8.7 | 7.6 | 1.1 |
Comments: Some analysts expect 2011 GDP to grow a sturdy 5%. | ||||||||
Taiwan | Taiex | 7,342.96 | -15.1 | -3.9 | 6.7 | 12.9 | 10.7 | 1.5 |
Comments: Reasonably valued, big commodity exporter. | ||||||||
India | Sensex | 16,469.80 | -19.7 | -9.8 | 5.4 | 13.4 | 11.5 | 2.4 |
Comments: One of worst-performing markets this year but GDP still growing strong. | ||||||||
MSCI Emerging Markets | 41,204.16 | -14.5 | -4.6 | 1.1 | 12.6 | N/A | 1.9 | |
Comments: Impressive GDP growth, well-run economy merit premium valuation. | ||||||||
MSCI World | 782.98 | -12.8 | -2.8 | -6.5 | 14.4 | N/A | 1.8 | |
*Annualzed. **Estimated. | Sources: Bloomberg; MSCI |
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China, Brazil and South Korea, it bears noting, are among the biggest and most liquid markets in the developing world.
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