HSBC Gam’s Hervé Lievore, a senior macro and investment strategist, has recently told FE Adviser that poor emerging market performance in 2013 and early 2014 continued a recent trend which has seen emerging market equities lose 2.3% in dollar terms last year as developed equities gained 27.4%. – a near-30 percentage point gap has not been seen since the emerging market crisis of 1997-98. He also expressed concern about emerging market current account deficits:
“Since 2008, emerging market countries have seen a significant deterioration in their combined current account balance. As a group, excluding China, their combined current account has been in deficit since 2010, after 11 years of surpluses… We saw in 2013 that countries running current account deficits showed greater volatility, a logical consequence of the fact they are net capital importers. Conversely, countries like South Korea and Taiwan, which have a net financing capacity, were significantly more resilient.”
To read the whole article, Sell-offs ‘serve as a reminder of EM risk’, go to the website of FT Adviser. You might also want to check out: Stop Worrying About Emerging Market Current Account Deficits (FE Trustnet)
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