Van Eyk wary of global emerging market outlook
Influential research and ratings house van Eyk has expressed caution in the outlook for global emerging markets (GEMs), but has suggested that it may yet deliver long-term rewards.
In a review of the global emerging markets sector, the head of investment research at van Eyk, Nigel Douglas, said the company was cautious on the sector, despite the large sell-off in emerging market stock markets.
He said that valuations relative to developed markets showed that the emerging markets sector was slightly expensive and there was still uncertainty about the magnitude of the impact of the recession in advanced countries on GEM company earnings.
“Also, investor confidence in riskier sections remains low and this depends on the success of measures by governments and central banks to restore liquidity in the global banking system,” Douglas said. “Increased political uncertainty in some countries such as India and Thailand is another issue for investors to evaluate.”
AUTHOR
Mike Taylor
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