Emerging Markets Crisis Over – Nomura

The worst is over for Asian emerging markets after investors pulled billions of dollars last month on concern the U.S. Federal Reserve will start cutting back bond purchases, according to Nomura Holdings Inc.

“We’re through the worst of the crisis but it doesn’t mean individual countries won’t continue to suffer significant challenges,” Steve Ashley, London-based head of global markets at Nomura, said in an interview. “We remain relatively positive on the longer term performance of risk assets in Asian emerging markets.”

The outlook for Asian emerging markets remains “very positive” over the next five to 10 years as the amount of investments by funds in these countries will likely have to catch up with the growing size of their economies, Ashley said in Singapore on Aug. 30.

The market value of shares traded in China accounts for 37 percent of gross domestic product, compared with 107 percent for stocks in the U.S., according to data compiled by Bloomberg. The proportion is 45 percent for Indonesia and 54 percent for India, the data shows. The International Monetary Fund in July predicted the economies of developing Asia will expand 6.9 percent this year, compared with 1.7 percent for the U.S.

Bloomberg

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