These Are 2018’s Most (And Least) Attractive Emerging Markets
By some measures, Mexico and Turkey come out as the most attractive emerging markets for 2018.
In a Bloomberg analysis based on a range of metrics including growth, yields, current-account position and asset valuations, the two countries score highest among 20 developing economies. Asian economies occupy the five lowest-scoring positions.
Mexico and Turkey scored higher because their real effective exchange rates are more competitive than the average of the past 10 years, according to the analysis. India and China’s valuations are relatively expensive in historical terms. Their economic growth is unlikely to be as fast as it has been in the past decade, estimates show.
Turkey’s five-year government bond yields about 13 percent, while Mexico’s yields 7.5 percent. Both exceed India’s equivalent rate of about 7.3 percent, which is the highest among Asian nations covered by the analysis. China’s yields about 3.9 percent.
The study covers 20 of the 24 markets making up MSCI Inc.’s Emerging-Market Index. Greece is excluded owing to its use of the euro, while Egypt, Qatar and Pakistan are excluded because of data limitations. The result for each is shown as a Z-score, which measures the relationship of the individual value to the 10-year average.
/Source: Bloomberg/
Jan. 22, 2018