"By Marcus Svedberg of East Capital
As financial markets started to price in tapering over the summer, it became popular to “RIP the Bric” story in what turned out to be an almost comical coincidence with the departure of the acronym’s founder.
But the financial death of Brazil, Russia, India, China and (sometimes also) South Africa was, of course, exaggerated.
The performance since the end of June, roughly when the tapering scare had been priced in, is telling, as the Brics have gained between 5 and 20 per cent since then. The real irony, however, is that by dismissing the group as whole, the critics miss the finer point of the inherent differences within the group.
The differences are pronounced in terms of resilience towards an external capital freeze as well as in terms of equity market valuations. Both factors should have great importance for the near term outlook.
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| Source: East Capital |
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