Beware of Booby traps in Emerging Markets
Thursday, October 1st, 2009Beware of Booby traps in Emerging Markets
By: Sam Subramanian PhD, MBA
Year 2009 has been a good one for investors in emerging markets. Since bottoming on November 20, 2008, the MSCI Barra Emerging Market Index is up 84%. Equity prices in Brazil, Russia, India, and China or the BRIC nations are up a higher 93%.
Off-late, equity prices in Eastern Europe are up strongly and trying to catch up with other emerging markets. During the past three months, the MSCI Barra Eastern Europe (excluding Russia) Index is up 28%. This exceeds the 18% and 20% gains scored by equities in emerging markets and BRIC nations, respectively.
And, as emerging markets continue to rake in gains, calls for U. S. investors to invest overseas are growing louder. The underlying rationale is that prospects for economic growth in such markets are superior to those in the U. S. and such markets may be immune to the credit crisis.
(more…)





