US fund managers set to rediscover EM stocks

Emerging markets sign1High valuations in the developed world are predicted to push US fund managers to invest heavily in emerging market equities, causing a "reawakening" of the asset class. "Emerging market equities have taken a multi-year breather," says Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, who spoke at a briefing for journalists in Dubai. "There's likely to be a reawakening." Grohowski added that "value" managers, who buy stocks that appear undervalued according to fundamental analysis, will lead the charge into emerging market equities. "Tactically, what's popping up on screens of value managers are emerging market stocks," he says. "You'll find more stocks trading a low values here than in the developed world." Although Grohowski held back from saying the US stock market was overpriced, he suggested the rapid rise in indices such as the S&P 500 meant the US market was "fully valued" and equity investors should look elsewhere for growth. He added that many ominous signs in emerging markets, such as the potential for a financial crisis in China, had already been "priced in" by equity investors, meaning emerging market stocks were relatively inexpensive. ©2015 funds global mena

Executive Interviews

INTERVIEW: ‘Financing is the blood of Iran’s economy’

Jan 04, 2019

Amid a fresh wave of American sanctions, Romil Patel spoke to Meysam Hamedi, director of financial markets and instruments at Iran’s Securities & Exchange Organization (SEO).

INTERVIEW: Totally mega

Jun 13, 2018

In 2016, global consulting firm PWC forecast the emergence of five global ‘megatrends’ in the next two decades. Stephen Anderson, its Middle East clients and markets leader, talks about their...


ROUNDTABLE: Hooked to the global caravan

Jan 04, 2019

With the MENA region at a tipping point, our panellists talk about economic diversification, the impact of regulation and the delayed Saudi Aramco listing. Chaired by Romil Patel in Dubai.

MENA ROUNDTABLE: ‘The story is about reforms’

Jun 13, 2018

Our cross-industry panel discuss the positive backdrop in Egypt, the Dana Gas controversy and the potential index upgrades of Saudi Arabia and Kuwait. Chaired by George Mitton in Dubai.