News and Press

Mirae Asset Global Investments (“Mirae Asset”) published their 2014 Emerging Markets Mid-Year Update today. The twenty page report, authored by the Mirae Asset senior investment team led by CIO José Gerardo Morales, CFA, reflects back on the first half of 2014, in addition to providing insights for various regions for the remainder of 2014.Click for the report

The report states that emerging market equity perfor¬mance has differed somewhat from consensus predictions. Emerging market equities, as measured by the MSCI Emerging Markets Index, returned 6.1% as of mid-year, due to falling U.S. 10-year yields, the relative attractiveness of emerging markets versus European yields, and elections in Turkey, Brazil, India and Indonesia. Mirae Asset contends that the rebound of emerging markets was further helped by the fact that much of the impact of tapering by the U.S. Federal Reserve was already seen in the second half of 2013, followed by quick damage-control exercises by the central banks of the “Fragile Five” (Brazil, India, Indonesia, South Africa and Turkey), all of which have outperformed versus the MSCI Emerging Market Index year to date.

Regional insights include:

Asia ex-Japan:

• Key economies of China and India show signs of stabilization.
• Reforms will be an important part of the underlying story in both countries in the second half of 2014.

Latin America:

• Brazilian equities are likely to remain volatile until October elections, and remain reactive to poll readings and political headlines. The Brazilian market may offer upside potential in the event of a politically driven re-rating, both before and after the presidential vote.
• Mexico remains an attractive market despite high equity valuations and lagging the region during the first half of the year.

Eastern Europe, the Middle East and Africa (EEMEA):

• The Euro-area linked economies of Poland, Hungary and the Czech Republic are faring much better than Russia, South Africa and Turkey.
• The Turkish market is likely to remain volatile, though it offers good opportunities with accelerating growth potential.

Key Takeaways:

• Elections and the actions of central bankers will continue to significantly impact key regions in emerging markets for the remainder of 2014.
• Overall, it remains imperative to retain a selective and active approach to emerging markets as we enter the second half of 2014.

Contributors:

• José Gerardo Morales, CFA: CIO – Mirae Asset Global Investments (USA)
• Young Hwan Kim: Deputy CIO – Mirae Asset Global Investments (USA)
• Rahul Chadha: Co-CIO – Mirae Asset Global Investments (HK)
• Byung Ha Kim: Co-CIO – Mirae Asset Global Investments (HK)