The visible decline of the globalism provoked by the Trump administration and the wide use of international sanctions is taking a toll from the emerging markets. It became difficult to invest abroad as it can lead to economic and social loss. The counterflow of Chinese funds to global economy has been also plunged as PRC does not have the excess of free assets as it used to be. London is in the middle of the Brexit process with uncertain results. Altogether these factors led to the decline of emerging markets. But US stock investors are looking for a bargains abroad and the fund managers are keeping eyes open to buy some assets cheap amid the sell-off.
The MSCI index which reflects the compound of the emerging markets is down 21% in 2018. Most of the emerging stocks are in decline as well as the rates of the national currencies are falling. It renders good conditions to cautiously enter the markets. Trade war has been a successful enterprise as US stock market is on its record highs. That will not last forever. It maybe a good time to exit the overheated US stock market and to look for the attractive alternative abroad.
The crucial key to succeed in the investing abroad is to catch the moment where the mood is at its low while fundamentals are good. US will not close the market totally and Trump administration has showed that it is very pragmatic in many ways. Positive news will definitely revive the emerging markets perhaps faster then they have fallen into the decline in the 2018.
Maurice Esma, a co-founder of EconomicInform is a freelance journalist with the expertise in international finance and corporate rights. The author can be reached by email maurice.eisma@economicinform.com
