A number of ‘buy' signals are now flashing for some emerging market assets despite longer-term headwinds, according to strategists at Bank of America Merrill Lynch.
Some of the most unloved sectors of the market, including EM resources stocks and EM debt, are now deeply oversold, the strategists said today, prompting them to suggest a "buy humiliation" theme. In a note entitled "GEMs can sing this summer", the team notes the combined market capitalisation of Wells Fargo and J.P. Morgan ($440bn) now exceeds that of every energy and materials company in Brazil, Russia India and China ($420bn). Emerging market assets have been hit hard in 2013 on fears of a more concerted slowdown in China and an end to QE in the US, putting them firmly on investors...
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