Emerging Market Opportunities in a Post Covid-19 World

Emerging Market Opportunities in a Post Covid-19 World

26th June 2020

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  • We believe that emerging market (EM) economies should show more resilience to the Covid-19 crisis than developed market economies. We see two key catalysts that should help drive strong EM equity performance in the second half of the year: (1) Covid-19 stabilization and the opening of the US economy, and (2) a weaker US dollar.
  • Asia ex-Japan: China, South Korea, Vietnam and Taiwan were the first countries to impose quarantines and lockdowns. These countries are recovering and moving towards economic normalization. US-China rhetoric will likely continue to weigh on market sentiment in the near term, but it may also provide an opportunity for strong Chinese brands to make further inroads with domestic consum­ers and gain market share from their foreign competitors.
  • Latin America: Latin American countries have recently faced headwinds from various directions. However, we believe that the combination of a low base for earnings, attractive valuations, and high growth rates create strong prospects for select companies in Latin America.
  • Eastern Europe, Middle East & Africa (EEMEA): EEMEA presents a diverse opportunity set going into the second half of 2020. With oil at historically low prices, countries like Russia, Saudi Arabia, and the United Arab Emirates may benefit from improving supply & demand dynamics, which should improve their respective trade balances, fiscal balances, currency dynamics, and equity markets.

 

 

 

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