Salient to Investors:
Mark Mobius at Templeton Emerging Markets said:
- Developing-nation equities will climb in 2013 on low debt levels, high foreign exchange reserves, economic growth that may average 5 percent in 2013, central banks adding money to the financial system.
- Low interest rates make equities very attractive. sending institutions et al on an incredible hunt for returns, including frontier markets like Kenya.
- Countries don’t want their currencies to be too strong, so they print money.
Robin Brooks and Julian Richers at Goldman Sachs expect the MSCI emerging market index to rise to 1,125 on improving data from developing economies.
John-Paul Smith at Deutsche Bank said emerging markets will lag developed nations in 2013.
The MSCI is at 13 times reported earnings, with a dividend yield of 2.7 percent, versus 1.7 percent for 10-yr Treasuries.
48 of 49 economists expect the Fed to add buying Treasuries to its mortgage bond buying program.