ING Investment Management’s (ING IM) strategists are of the opinion that Mexico, India and Turkey will buck sector underperformance and possess potential for further growth, according to Fundweb.
"We believe that EM equities are in a longer-term underperformance trend that already started in October 2010. However, we do see opportunities and, for now, we feel comfortable with overweights in Mexico, India and Turkey, the latter two despite large current account deficits," Fundweb quoted ING IM senior emerging market equity strategist, Maarten-Jan Bakkum as saying.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Bakkum singled out the Indian government’s fiscal consolidation focus as an important factor, helping inflation come down which ING IM predicts will enable the central banks to continue slashing interest rates in upcoming quarters.
However, Bakkum is still bearish on certain emerging markets and gave three as to why he thinks emerging markets will continue to struggle.
"Firstly, our expectation that Chinese growth will gradually decline to around 5% in three to five years from now. Secondly, there is the increased reliance of emerging market domestic demand on new credit and foreign portfolio investment. And thirdly, the increasing state intervention in emerging market economies, which creates more regulatory risk and reduces the room for private companies to make profits," the publication further quoted him saying.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
