Is the bull back in the emerging markets? After a massive sell-off in 2008 on global credit crisis, emerging markets once again seem to be back in favor. The Morgan Stanley Emerging Market index (MSCI), the benchmark used by most international fund managers, gained 47.5% in the first seven months of2009 till 28 July as against a fall of 55% in 2008. In the same period till 28 July 2009, the developed markets' MSCI World index rose 12% as against a 42% decline in 2008.
The BRIC countries have led from the front, registering a 59% return, with India reporting a 66% gain, a notch behind Brazil that recorded a 67% growth in the first seven months of 2009. Russia and China both surged 53% and 51%, respectively. However, among the emerging markets, Indonesia was the biggest surprise, rising 80% (see table: BR/C countries lead). But the small size of the Indonesian market does not make sense for it to be compared to the biggies like India and China.
So what led to this jump? "The rise has been due to retraction of pessimism," says DBS Chola Mutual Fund CEO Sanjay Sinha. Adds Singapore-based UFL Capital Pte Co-head Investments Deepesh Pandey: "The rise in risk appetite for equities saw
The BRIC countries have led from the front, registering a 59% return, with India reporting a 66% gain, a notch behind Brazil that recorded a 67% growth in the first seven months of 2009. Russia and China both surged 53% and 51%, respectively. However, among the emerging markets, Indonesia was the biggest surprise, rising 80% (see table: BR/C countries lead). But the small size of the Indonesian market does not make sense for it to be compared to the biggies like India and China.
So what led to this jump? "The rise has been due to retraction of pessimism," says DBS Chola Mutual Fund CEO Sanjay Sinha. Adds Singapore-based UFL Capital Pte Co-head Investments Deepesh Pandey: "The rise in risk appetite for equities saw
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