The longest losing streak for developing-market equities in more than a decade is turning investors who shunned the stocks a year ago into buyers after valuations fell to the lowest levels since March 2009, the gurus at Bloomberg tell us.
TCW Group Inc.’s Komal Sri-Kumar, who advised purchasing options as insurance against emerging-market declines in October 2010, now recommends shares of consumer companies after inflation slowed in China and central banks in Brazil and Turkey cut interest rates. HSBC Private Bank’s Arjuna Mahendran is adding Chinese stocks with dividend yields of more than 4 percent. Harris Private Bank’s Jack Ablin said he may boost emerging-nation shares to 10 percent of holdings from 3 percent.
MSCI Inc. (MSCI)’s emerging-market gauge sank 30 percent from its May 2 high and slumped 23 percent in the three months to Sept. 30, trailing the advanced-nation index for four straight quarters for the first time since Russia’s 1998 default, as Europe’s debt crisis and concern the U.S. economy may contract led investors to flee riskier securities. The drop sent shares in the MSCI Emerging Markets Index to 1.5 times net assets, the lowest level versus the MSCI World Index in 30 months...
Read more about it at http://www.bloomberg.com/news/2011-10-03/emerging-equity-bears-turn-bullish.html
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