Citi Sees Good Valuations of Emerging Market Stocks

The recent sell-off in global markets has pushed valuations for emerging market stocks to their cheapest level this year, according to Citi.

The price-to-earnings (P/E) ratio of the MSCI Emerging Markets Index is currently below 10 – levels not seen since November 2012 – and Citi recommends investors regain exposure to these stocks now instead of waiting for a catalyst to drive a turnaround.

“We think the situation has to get really dire in EM [emerging markets] to justify equities at these multiples. We do not expect that to happen. Of course EM economies have their problems, but it seems that share prices are already discounting something much worse,” strategists at the bank wrote in a note published late Tuesday.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza