Slicker than Yukos - and then some. The contradiction of governance

COLLINGS' CORNER

It is almost an unspoken rule that in order to appear ‘prudent', emerging markets fund managers are expected to take a view that emerging markets require a valuation discount.

Investors have been repeating this unfortunate generalisation for so long that it has become a deeply-rooted belief, and a difficult one to break.  Economic fundamentals in major emerging markets have become superior compared to their developed peers, with higher growth, better demographics and much lower debt levels. Higher volatility in emerging markets is a function of a relatively smaller market capitalisation and hence lower liquidity. As such, it is not a fundamental reason for the discount and it is more of a concern for short-term traders. When all the ammunition of the emerging ...