"Is the “resolution” of the US debt ceiling drama a trigger to pile into EM? Benoit Anne at Société Générale thinks so. In a note on Thursday morning he told clients it created room for a sizeable rally in global emerging markets.
But hasn’t that already happened?
Here is Anne’s argument:
All stars are aligned in our view, including signals that the Fed QE tapering is at risk of being further delayed, the improvement in EM technicals, the strengthening of EM growth fundamentals and more attractive valuation. In the near term, what we are going to watch closely is real-money investor behaviour, as we believe that they remain massively under-invested. Most of them were waiting for a trigger and the resolution of the US debt ceiling issue may now pave the way for a buying spree in GEM."
'via Blog this'
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