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Key generators of recovery

The powerful tailwinds of low interest rates, pro-growth fiscal policy and improving

terms of trade are generating a recovery in the emerging economies led by China,

says JP Morgan. 

JP Morgan Securities (Asia Pacific) Ltd chief Asian and Emerging

Markets equity strategist Adrian Mowat viewed that market recovery was supported

by a recovery in the emerging markets and demand led by China. “We argue that

the potential for the MSCI EM (Emerging Markets) Index to return to pre-Lehman

Brothers bankruptcy levels by year-end is high,” he told a press briefing yesterday.

Mowat also opined that emerging markets offered lower risk and volatility as well as

higher returns in periods of high-economic stress. He noted that there was

increasing evidence that the China government’s aggressive stimulus package was

re-accelarating domestic activity against a backdrop of weak external demand.

(source, CIMB Research)