What’s Driving the Emerging Market Opportunity?
Mirae Asset Mutual Fund • 3 days ago
What This Video Is About
The video discusses the current state of emerging markets, highlighting their attractive valuations and high EPS growth compared to developed markets.
Major Ideas Discussed
- Emerging markets have traditionally traded at a discount to developed markets due to differences in EPS growth, but are now seeing EPS growth close to or eclipsing 60%.
- Despite higher EPS growth, emerging markets trade at a 42% discount, making them an attractive option.
- The S&P 500 companies have delivered strong results in the last three quarters, reflecting positively on EPS, while emerging markets' valuations are lower.
- The market scenario for individual emerging markets varies, with some countries driving the big discount due to earnings growth outpacing price.
- Countries such as Korea and Taiwan are leading the positive earnings revision, driven by the semiconductor industry, while commodities are also contributing to the uplift in Africa and Latin America.
- Financials are experiencing momentum due to improved efficiency ratios, loan growth, and NIM expansion in a higher interest rate environment.
What to Watch Next
Investors should monitor the growth and convergence of emerging markets with developed markets, as well as the performance of individual countries and sectors, such as the semiconductor industry and commodities.