The crisis is canceled: the largest investment funds predicted the growth of emerging markets

The full-scale crisis in emerging markets has not yet begun, and the largest investment banks and funds have already announced its end: according to Goldman Sachs, BlackRock and Templeton, for three managers of almost $10 trillion, emerging market assets have reached the bottom and it is time to buy them. After previous big drops, emerging markets have averaged more than 30% gains over the course of the year.

• Since January 2017, emerging markets have fallen 15% and lost $7 trillion in money. Representatives from the world's largest investment fund BlackRock, Goldman Sachs and emerging markets fund Templeton told Bloomberg that they believe the investor exodus is over. It should be noted that most banks, according to the latest Bloomberg poll , do not agree with them.
• several graphs to confirm this Bloomberg cites : 1) the difference in yield between emerging and US markets has reached 17% - it has not risen higher since the crisis of 2008-2009. 2) In the last week of June, the outflow of funds from EM funds reached its maximum since the presidential election in the United States - historically, after such peaks, the reverse growth begins. 3) The exchange rates of developing countries are at a minimum, similar to January 2016, after which they (except for the Russian one) have been continuously growing for two years.
• If the recovery starts, it will be fast, another graph clearly shows - in the last 30 years, after periods of maximum intra-annual decline, emerging markets grew by 32% in 12 months.
• about this A similar opinion is shared by the former chief forecaster of the Ministry of Economy Tremasov, who wrote an article for Forbes. Nobel laureate Paul Krugman and Bank of America warned of the possibility of an early repeat of the 1998 crisis, but the current situation is different - there is no overheating in the markets, which means that a sharp drop is impossible.

What do I get from this?

The Russian market, due to sanctions and cheap oil, did not participate in the previous two-year rally in emerging markets. Now the situation in Russia is again different from other countries in the sector: market leaders are under sanctions or at risk of being under them - and this will continue to repel investors, says Alexander Losev, CEO of Sputnik Capital Management. He considers the best investment ideas to be the shares of the least government-affiliated exporters (as far as possible) - Lukoil, Tatneft, Surgutneftegaz: they will benefit from the ruble that has fallen in price against the backdrop of an increase in the Fed rate and will suffer less from geopolitics than the conditional Rosneft he says.

Peter Myronenko