Salient to Investors:

  • BIS said unprecedented stimulus by central banks and historically low volatility levels across asset classes have made it more likely that emerging markets will destabilize. BIS said governments and companies from Latin America to Asia have boosted borrowing in local and foreign currencies, leaving them more vulnerable when interest rates increase or their exchange rates weaken.
  • John Lomax at HSBC said emerging markets are concerned with the substantial move of the dollar and US interest-rate expectations, while sanctions remain a constraint on Russian equities.
  • The MSCI developing-nation index is at 11.1 x estimated earnings versus 14.9 x for the he MSCI World Index.

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