While growth rates in many economies have slowed in recent years, emerging markets are generally still growing much faster than developed markets.
We expect a growing middle class, coupled with higher disposable incomes and low penetration in products such as cars, computers and mobile phones, to boost domestic consumption in the long term, further supporting GDP growth. In addition, we think high foreign exchange reserves and relatively lower debt levels bode well for emerging markets, potentially allowing governments to withstand external financial shocks. In terms of valuations, emerging markets have remained attractive, with a 12-month forward P/E ratio of 10 times, while developed markets, as represented by the MSCI World ind...
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