Overweighting EM Equities

MRB have been overweight EM Asia for the last two years and in a report out at the beginning of March they have increased this position to include global EM equities. Expanding trade volumes, increasing bank earnings and undemanding valuations are the main reasons. However, within Asia, they have moved to a downgrade bias on the neutral weight for China. They are bearish towards Chinese financial stocks and to Indonesia as a whole, due to a lack of economic growth momentum and stalled structural reforms. They also make the point that global trade growth is on a tear, and this includes commodity exporters. The weak dollar is offsetting the fall in Chinese demand for commodities to supply its old industrial strategy. There will be winners and losers in this scenario and so they break it down country by country in this report. Click below to request trial access to read this report.